Definition
Factoring in which customers aren't notified and keep paying the business directly.
Why it matters
Also called non-notification factoring; usually reserved for established companies.
Where it shows up in a deal
Confidential factoring is proposed when a business cannot or will not have its customers notified - typically because a large buyer treats assignment as a signal of distress. The invoices still carry no assignment legend and remittances land in a neutrally named account, so the funder replaces notice-based verification with audits, system access and tighter reporting.
What it affects
- It is usually reserved for established companies with reliable management accounts and low dilution.
- You keep collections, so late reporting or a misapplied payment becomes your problem to unwind.
- Advance rates and eligibility are often slightly tighter than on an equivalent notification facility.
- Periodic field audits are a condition, and their cost belongs in your all-in comparison.
The common mistake
Related terms
- Non-Notification FactoringFactoring where customers aren't told their invoices are assigned.
- Notice of AssignmentA letter telling customers to pay the factor instead of the business.
- Invoice DiscountingBorrowing against invoices while keeping control of collections.
- UCC-1 FilingA public notice that a lender has a security interest in a business's assets.
Questions about how confidential factoring affects your facility?
Call (929) 658-8087 or request a written quote — no obligation, no credit impact.
