A notice of assignment (NOA) is a letter that tells your customer you have sold or assigned your invoices to a factoring company and that future payments on those invoices must go to the factor's account. It is usually prepared by the factor and signed by you, and the customer's accounts payable team acknowledges it and updates its payment instructions. Because the customer has to process that change, the NOA is often what makes the first factoring funding take longer than later ones.
Review My Funding Options →An NOA is short. It typically includes your business name, the factoring company's name, a statement that your receivables have been assigned, new remittance instructions (bank account or lockbox), the instruction that payments to anyone else may not satisfy the debt, and a request that the customer sign and return an acknowledgment. Some customers also ask for a W-9 or vendor form for the new payee.
The legal reason is simple. Under commercial law in most states, once a customer has been properly notified, paying the original vendor instead of the assignee may not discharge what it owes. That is why factors insist on the notice before they advance against invoices.
Your customer's payment terms do not change. It still pays on net 30, 60 or 90; only the destination of the payment changes.
Large customers have vendor-change controls designed to stop payment fraud. A change of remittance account may need several approvals, a callback to you and a form in their vendor portal. Government customers often have their own assignment rules. Until the customer acknowledges the NOA, many factors will not fund, or will fund a smaller amount.
Spring (spring.ai) describes the same pattern for its retailer factoring and PO financing. According to its website, checked October 15, 2026, Spring says the first funding usually waits on the retailer's notice of assignment, which takes days to a couple of weeks depending on the retailer, and that later invoices are typically funded within 24 hours. Spring also publishes a post titled "What is a NOA." Spring's factoring is aimed at consumer brands selling to large retailers and distributors; see our Spring review.
$5,000 to $5,000,000. Scores from 500 considered. Same-day decisions are common on complete files.
Review My Funding Options →An illustrative timeline for a first factoring setup with a mid-sized business customer:
| Day (illustrative) | What happens |
|---|---|
| Day 1 | You apply and send open invoices, customer list and bank statements |
| Days 1 to 2 | Factor reviews your customers' credit and your invoices; you receive an offer |
| Day 2 | You sign the factoring agreement and the NOA; you call your customer's AP contact |
| Days 2 to 3 | NOA is delivered to the customer |
| Days 3 to 10 | Customer's AP processes the vendor change and signs the acknowledgment |
| After acknowledgment | First advance is funded on the assigned invoices |
| Later invoices | Usually much faster, because the customer is already set up |
| Customer's due date | Customer pays the factor; the factor sends you the reserve minus its fee |
A customer with a slow vendor-change process can stretch the middle step. A customer you have already introduced to the change can shorten it.
MFE's invoice factoring is for invoices to business or government customers on net 30 to 90 terms. Customer notification is part of standard factoring, so plan for the first funding to take longer than later ones, and tell us early which customers you want to factor and who their AP contacts are. If you need cash before the NOA clears, ask whether a working capital loan or merchant cash advance makes more sense for that gap; the trade-offs are covered in invoice factoring vs MCA. To start, apply online.
Merchant Fund Express reviews merchant cash advances, working capital, lines of credit, equipment financing, invoice factoring and refinancing of existing advances, from $5,000 to $5,000,000.
Review My Funding Options →Or call (305) 384-8391. English and Spanish.
In notification factoring, yes, because the NOA tells them to pay the factor. Most business customers treat this as routine. Some factors offer non-notification arrangements, but they are less common and usually cost more.
No. The customer keeps its normal terms, such as net 30, 60 or 90. Only the payee and remittance details change, so the customer pays the factoring company instead of your business.
It depends on the customer. Smaller customers may acknowledge within a day or two; large retailers and government agencies can take one to two weeks or more because of vendor-change controls and approvals.
Your agreement will usually require you to forward that payment to the factor promptly. Repeated misdirected payments can cause problems with the factoring relationship, so confirm the customer has updated its records.
When the factoring relationship ends and the balance is settled, the factor sends a release letter telling the customer to resume paying you directly. Ask how the release works before you sign.
Sources. Spring invoice factoring; Spring FAQ. Competitor details checked October 15, 2026. Merchant Fund Express publishes this page and offers competing business funding; it has no affiliation with the companies named. Terms change, so confirm them with each company. Spotted an error? Call (305) 384-8391.