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Will insurance companies allow an A/R Factoring company to receive payments through a lockbox to pay the contractor?

Maryland

I am a loan broker who is trying to help a restoration company get back on its feet. It needs working capital because A/R payments are very slow. The owner loaded up on personal credit cards to provide working capital to his company. As a result, his credit score has tanked and banks are rejecting him. I believe we can get some relief if insurance companies will allow payments to the restoration company through a lockbox set up by the A/R factoring company.

2 replies

May 17, 2022

If by insurance companies you do not mean sureties, then it would be unusual to say the least if GL, auto, WC/EL carriers were required or needed to be involved at all in that decision and its implementation. Some of our trade partners use factors from time to time, either at our request or the request of their sureties financial partners. 

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May 17, 2022
Thanks for responding. I was working with a restoration company. They get selected by insurance adjusters to repair damaged residential and commercial properties due to unforeseen events such as fire or wind damage, etc. The company wants to use a factor to speed up receivables from the insurance companies. Would insurance companies permit a factor to collect the insurance company payments through a lockbox? Thank you.
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