Last Updated: 11 September, 2023
FlexCharge has developed an innovative solution that enables merchants to tackle failed payment transactions suffered by their customers.
When payment transactions fail, merchants automatically assign these transactions to FlexCharge. These declined transactions are evaluated in real time with our unique technology and, if considered eligible, that triggers a factoring service for the applicable invoice. Hence, FlexCharge, through its technology, enables merchants to assign and factor their invoices.
Invoice factoring is not trading or a loan. Invoice factoring gives merchants access to funds they already earned by advancing the receivable. Invoice factoring is different to traditional methods of lending and funding and as such is not regulated under the same legislation traditional lenders are subject to.
Notwithstanding the above, disclosure requirements are required in certain jurisdictions. New York State regulations, for example, require a “provider” (i.e., a commercial finance service provider) to provide the “recipient” (i.e., the merchant) with disclosures “at the time of extending a specific offer” for open-end financing, closed-end financing, sales-based financing, or a factoring transaction. The Californian Financing Law (“CFL”) also requires the provider that facilitate “commercial financing” to disclose, at the time of extending a specific offer of commercial financing, specified information relating to the transaction such as the total amount of funds provided, the total cost of the financing, the term or estimated term, etc.
These disclosures are provided herein below, as well as in each order form we execute with our merchants.
Most factoring service providers are members of self-regulate associations such as the International Factoring Association and the Secured Finance Network, which FlexCharge is in the process of joining.
The information provided in this page is for general awareness and knowledge, it does not constitute legal or professional advice, or warranty of compliance with applicable laws.