When you enter a factoring contract, you agree to sell your invoices, or accounts receivable, to a factoring company or third party that gives you a cash advance. This third party will then become your company’s collection department on these invoices. To notify your clients of this change of invoice ownership, the financial provider will send them a Notice of Assignment (NOA).

If you’re considering factoring your accounts receivable, you may be wondering what an NOA contains and what effects it may have on your customers and business. In this guide, we’ll cover the components of an NOA, how your factoring company sends them, and their role in the factoring process.

What Is a Factoring Notice of Assignment?

A Notice of Assignment is a formal document sent to your customers to inform them that a third party, such as Porter Capital, has taken ownership of your accounts receivable. It lets your customers know that payments on future invoices should now be sent directly to your factoring partner rather than your business.

This process begins when you enter into a factoring agreement. You sell your outstanding invoices to us in exchange for a cash advance, and we become the collection agent for those invoices. The NOA is the first step in this new arrangement. It serves as a legal notice and includes updated remittance instructions, informing your customers about the change in payment management.

How Do Factoring Companies Notify Your Customers?

Factoring is more common than ever and clients range from NYC modeling agencies and namesake branded product line manufacturers, to small startup companies selling gourmet food items. No company is too large or too small to factor their invoices and many work with big box stores that demand longer payment terms to have products on their shelves. These 90 to 120 day payment terms can make factoring a necessity for smooth cash flow.

Your customers will receive the NOA as a letter in the mail to sign and return. Your business will also receive a copy of this letter. Ensure you fully understand the language used in the NOA and your responsibilities in the transition process. Sometimes business owners worry about their customers’ reactions to receiving an NOA. Invoice factoring is becoming an increasingly popular and acceptable means for financing businesses across many industries, so your customers may already be accustomed to the process. You can alert your clients about a coming NOA, proactively resolving any questions or concerns that may arise.

Why Is a Factoring NOA Important?

The Notice of Assignment is more than just a formality—it is a critical legal document. Once your invoices are sold to Porter Capital, those receivables become our property. Because these assets are intangible, we use the NOA to establish our legal right to collect on them.

Without this notice, customers might unknowingly continue sending payments to your business. This could lead to confusion, delays in processing, or even a breach of contract. If a payment is misdirected, we work closely with our clients and their customers to correct the situation. For example, if your business receives a payment that should have gone to Porter Capital, you are responsible for promptly forwarding that payment. We will then reissue the NOA to confirm and reinforce the correct remittance process.

Ultimately, the NOA ensures that everyone involved understands their responsibilities, which helps maintain healthy business relationships and uninterrupted cash flow.

What Is Covered in a Notice of Assignment?

Each NOA issued by Porter Capital is written clearly and includes the essential details your customers need to know. Here’s what it typically contains:

• A statement that your accounts receivable have been assigned to Porter Capital

• Updated remittance address and payment instructions

• An explanation of the customer’s responsibility in the event of misdirected payments

• Optional guidance for your business in case you receive a payment intended for us

By clearly outlining this information, the NOA supports a smooth transition and helps avoid payment issues that could disrupt your cash flow.

Components of a NOA Document

The NOA document will contain a few vital pieces of information, including:

• Notification that accounts receivable have been assigned and is payable to a third party
• An updated payment address.
• An explanation of customer liability in the event of a misdirected payment.

Each component of the NOA ensures the factoring relationship runs smoothly by giving customers the information they need to make correct payments. It may also outline steps for your company to take if you receive a misdirected payment. As a lender we will provide you with an NOA but you can also view a sample template.

What Will My Customers Think About the Notice of Assignment?

It’s common for business owners to worry that sending a Notice of Assignment might make them appear unstable or in financial trouble. However, that is rarely the case.

Factoring has become a mainstream financial solution across industries. A growing number of businesses are using invoice factoring to keep up with long payment terms, support expansion, and maintain healthy cash flow. According to industry research, the global factoring market is growing steadily, with an annual increase of more than 10 percent.

Your customers, whether they are small businesses or Fortune 500 companies, are likely already familiar with factoring. They often understand that longer payment terms can create cash flow gaps and that factoring helps close those gaps without burdening your operations.

In our experience, clients who are upfront about the NOA and explain its role in the process often find that their customers are supportive—or at the very least, unbothered—by the change.

How Porter Capital Is Different

At Porter Capital, we understand that the way we communicate with your customers reflects directly on your business. That’s why we focus on building trust and professionalism from the start.

When your customers receive a Notice of Assignment from Porter Capital, they are dealing with an experienced, established financial partner. With over 30 years in the industry, we have a strong reputation for professionalism, dependability, and client-first service. We serve businesses across a wide range of industries, from consumer goods and staffing firms to freight carriers and manufacturers.

Your customers can take comfort knowing they are sending payments to a respected partner rather than an unknown or short-term funding company. This extra layer of credibility reinforces the strength and stability of your business relationships.

In addition to our trusted name, we provide personalized support and a dedicated account team to guide you through every step of the factoring process—including NOA communication and customer management.

Notice of Assignment FAQs

What does a Notice of Assignment mean in trucking?

In the trucking industry, invoice factoring is extremely common due to extended payment cycles from brokers and shippers. A Notice of Assignment informs your clients that your factoring partner, Porter Capital, is now managing collections. It allows you to get paid faster while ensuring your customers send payments to the correct party.

Who provides a Notice of Assignment?

In most cases, the factoring company provides and sends the NOA. At Porter Capital, we handle this on your behalf. We make sure the notice is delivered promptly and professionally, keeping you and your customers informed every step of the way.

Final Thoughts: Fast-Track Your Receivables with Porter Capital

If you’re looking for a way to strengthen your cash flow and improve your operational efficiency, invoice factoring with Porter Capital may be the solution. Our team is here to help you unlock the value of your accounts receivable while maintaining positive relationships with your customers.

With a reliable NOA process and a reputation built on trust, we’re ready to support your success. Whether you’re navigating tight margins or scaling quickly, Porter Capital is your partner for financial stability and growth.

Contact us today to get a personalized quote and see how our factoring services can work for your business.