Mobile Funding

Considering a Factoring Company? Look for These Features

Factoring for mobile apps

Working with a factoring company can be great for growing mobile app developers. Reinvest your earnings back into the business, grow faster, and get paid every week instead of 2-3 months later by the app stores and ad networks. Makes total sense, right?

While factoring can make things easier, the big questions facing mobile app developers are: 

  • Will factoring work for your business? 
  • What are the best factoring companies for mobile apps? 
  • Which financial institutions can – and should – indie developers turn to? 

Historically, traditional banks have had the monopoly on factoring. Unfortunately, they’re not always well-suited to meet the fast-changing needs of the mobile app industry. They tend to be slow, and require a level of manual upkeep with restrictive terms that are unreasonable for a resource-strapped entrepreneur starting out. 

Newer fintech companies are making factoring faster, easier, and more convenient. However, new companies can be unproven, and their products aren’t always reliable. They also may not have taken the time to deeply understand the mobile market. As a result, their products may not address your unique challenges.

Ask yourself what’s most important to you as you grow and run your business. Your goals will impact your decision to work with a specific company.

Below, we’ve put together 9 questions that app developers should ask when considering working with a factoring company. If you’re new to factoring, check out our App Developers Guide to Accounts Receivables Factoring.


1. Convenience: How much upkeep and maintenance will the factoring company require from you? 

Automation is one of the most important things to look for in a factoring provider. 

If you have to send an email or set up a meeting anytime you want to adjust the amounts you receive weekly, factoring becomes a slow process that adds an additional burden of time. Look for their invoice verification requirements. Traditional factoring businesses will probably only be able to advance monthly, at month end and may require confirmation of the invoice value from the customer (debtor).

So, look for a provider that allows you to control your funds without having to request a change in your factoring amounts. You should be able to adjust your funds yourself from within your account. 

Consider the amount of weekly or monthly maintenance required to manage it. If a factoring provider sends you invoices for each factoring service and amount, you’re going to need a dedicated accountant, if you don’t already have one.

Ideally, your provider can automate the whole process and won’t require any invoicing. Any factoring provider you work with should free up your time to focus on building, instead of creating more accounting work. The provider should be able to work quickly to set you up, too. Some providers can take 4-8 weeks or more, and require lengthy, time-consuming due diligence.


2. Expertise: What is the company’s target market? Is the company qualified and proven to support a business like yours? 

From freelancers to Saas, from sales to medical, you can find a factoring provider for many different markets. That’s because each market comes with very different sets of requirements and needs. A factoring company that focuses on freelance workers is very different from factoring for medical invoices and bills.

Given how many different factoring companies exist, at the very minimum you should be looking at providers that can specifically demonstrate experience and success within your industry. 

Does the factoring company have mobile industry expertise? Can their infrastructure handle factoring receivables across a complex web of app stores, ad networks, and attribution channels?


3. Product: Does the factoring company have a solid technology infrastructure?

New fintech companies rely heavily on the strength of their technology to provide better levels of convenience and automation. While improved technological infrastructure certainly can make things easier for you, make sure that the product can support your actual needs. 

For example, does the company support integrations to pull your sales data directly? Or will you still need to do this manually yourself? Do they automate payments? What product add-ons do they have that can provide value to your business (e.g., comprehensive mobile app analytics)?

Fintech companies that don’t invest as much in their technological infrastructure or tech support teams will tend to rely on doing much of the factoring work manually. This can lead to slower service and a potential increase in late or incorrect payments due to human errors.


4. Trustworthiness: Do they have a strong reputation for reliability? What is their track record for success?

Be sure that any factoring company you work with is one that you can trust with your financials.

Reputable companies tend to work with other reputable companies. Check out the company’s website to see their case studies and who they’ve worked with. Reach out to your network to see if anyone has worked with this company before and can share their experience. While marketing and PR can be good indicators of reliability, nothing substitutes word-of-mouth referrals and reviews.


5. Risk: Does the factoring company have the financial resources to stay in business?

How is the factoring company’s access to capital? Have they raised any rounds of debt financing? Do they have partnerships with institutional backers? 

Strong factoring companies plan for longevity. They should be able to give you the peace of mind that they’ll be able to support your growth for the long-haul. 


6. Add-ons: Can they provide value for your mobile app business? 

Most mobile app founders are focused on growth. Look for factoring companies that can provide specific value that is aligned with your goals.

For example, do they have an internal agency that can help with your marketing campaigns? Do they provide a business intelligence or analytics tool specific to your industry’s KPIs? Do they provide additional financial services that supplement with factoring your receivables?

While these might not be necessary for your current situation and immediate needs, it will be great to already be partnered with a company that can provide these additional services if the time comes.


7. Partnership: What does their client success program look like?

There’s a big difference between a growth partner vs. a financial provider. 

Growing a mobile app business is tough. A factoring company that really “gets it” about mobile will be there with you every step of the way.

You can learn a lot about how customer-focused the factoring company is during the on-boarding process. For example, you may be introduced to someone on the support team either during the on-boarding process or once you’re finished. They won’t just get you the funding and disappear. This person should be available to check-in and make sure you’re getting the support you need. 


8. Flexibility: What are the factoring company’s terms, fees, and maximum amounts?


What are their terms?

Are there time commitments or specified term lengths to work with this factoring provider? 

Things change fast in the mobile app market. Your marketing needs and business strategy can change quickly. How much you’re prepared to dial your factoring up or down may change with it. 

Your factoring provider should be able to adjust with you as a mobile developer. Factoring providers often try to lock customers into long contracts (e.g., 6-24 months), and make it difficult and costly to get out of them. For example, a factoring provider could require a 6 month commitment with auto-renewal clauses and hefty early termination fees. They may also require minimum monthly borrowing amounts. These types of requirements are untenable in the mobile app space.

Finally, what are their advance rates? Many traditional factoring businesses may only offer 70% upfront. 


What are their fees? 

Fees vary from provider to provider so it’s important to consider them in detail. Some providers offer a flat fixed fee on any amount you factor, regardless of whether you’re experiencing a high month or a low month. 

Others may depend on how far in advance you factor your receivables. For example, they may offer 2% for 30 days advance and .066% daily proration every day after up to 3.98%.


Do they have hidden or additional fees?

Of course, no one ever wants to discover additional or hidden fees. Unfortunately, chances are you will come across them when evaluating providers. 

Some examples of hidden fees may include early termination fees, compulsory audit fees, export surcharges, misdirected payment fees, arrangement fees, fees for wire transfers, federal express, application fees, return checks, money orders, and service fees. 

Double-check the service provider’s fees and how transparently they disclose them.


Do they have a maximum amount that you can factor?

If all goes well and factoring works as intended, your business grows, and it grows fast. 

However, if the provider has a maximum amount of revenue you can factor, this can potentially restrict or slow your growth once you hit that ceiling. Due to these restrictions, you may also reach a practical limit well below the actual credit limit, and their desired borrowing amount.

For example, you may be approved for a maximum of $500,000 that you can factor at any point in time. If your monthly revenue grows to $1,000,000, you no longer can factor all of your revenue. You’ll need to go through a manual process of changing the agreement and increasing your maximum – if this is even approved. You may be stuck with your credit limit for the duration of the contract term.

The best scenario is for your maximum to be uncapped, with no debtor concentration limits or weekly vs. monthly drawdowns. This gives you added flexibility to grow without negotiating hitting any ceilings. When you’re gaining momentum, the last thing you want is to slow down your growth.


9. Personal guarantees: Do they require personal guarantees or covenants?

Avoid personal guarantees at all costs. If the factoring provider requires one, that may put you at financial risk if something goes south.

Additionally, avoid restrictive covenants which may: 

  • Require you to fulfill certain conditions
  • Forbid you from undertaking certain actions
  • Restricts certain activities or circumstances when other conditions are met

Covenants reduce your flexibility to utilize factoring and may even require you to factor a minimum amount of your earnings monthly. For example, factoring providers that require you to use 20-50% of your maximum credit limit at all times are unfeasible for most app businesses. Even strong and healthy mobile app businesses will have their factoring needs fluctuate throughout the year. 



Now more than ever, access to working capital is crucial for mobile app businesses and games. Traditional sources of funding may have pulled back, but we have not. 

We’re here to help. If you’re a mobile app or gaming business looking for financing, you can learn more about our financing products here.

Security check
Please complete the reCAPTCHA below to proceed.