Invoice Factoring

What is Invoice Factoring?

Invoice factoring is a financing method where you sell your outstanding business-to-business (B2B) invoices to a factoring company at a discount in exchange for immediate cash. Instead of waiting 30, 60, or 90 days for your customers to pay, you receive the majority of the invoice value upfront — typically within 24 to 48 hours.

Unlike a loan, factoring is not debt. You're selling an asset (your receivable) for cash, so it doesn't appear as a liability on your balance sheet. This makes it an attractive option for growing businesses that need to maintain healthy cash flow without taking on additional debt.

80–95%

Advance Rate

24–48 hrs

Funding Speed

$10K–$10M

Factoring Limits

How Invoice Factoring Works

1. Submit Your Invoices: You deliver goods or services to your customer and generate an invoice as usual. Submit the invoice to the factoring company for review.

2. Receive Your Advance: The factor verifies the invoice and advances you 80–95% of the face value, typically within 24–48 hours of approval.

3. Customer Pays the Factor: Your customer pays the invoice directly to the factoring company on the original payment terms (net 30, 60, or 90).

4. Receive the Remaining Balance: Once your customer pays, the factor releases the remaining 5–20% to you, minus a small factoring fee (typically 1–5% of the invoice value).

Invoice Factoring vs. Invoice Financing

While often confused, these are two distinct products:

Feature	Invoice Factoring	Invoice Financing
Structure	You sell invoices to the factor	You borrow against invoices as collateral
Collections	Factor collects from your customer	You collect from your customer
Customer Awareness	Customer knows (pays the factor)	Customer may not know
Balance Sheet	Not recorded as debt	Recorded as a loan/liability
Best For	Businesses wanting cash + collections help	Businesses wanting cash + customer control

Our AI platform can match you with lenders offering both options — so you can compare and choose the best fit for your business.

Industries We Serve

Transportation and trucking
Staffing and recruitment agencies
Manufacturing and distribution
Construction and trades
Wholesale and import/export
Professional services and consulting
Oil and gas service companies
Government contractors

Who Qualifies?

B2B or B2G (business-to-government) invoices — consumer invoices are not eligible
Invoices must be for completed work or delivered goods (not future work)
Your customers must have reasonable creditworthiness (factor evaluates them, not you)
Minimum monthly invoicing volume of $10K (varies by factor)
No minimum credit score required — approval is based on your customers' credit

Benefits of Invoice Factoring

Immediate Cash Flow: Stop waiting 30–90 days for payment — get cash within 24–48 hours
No Debt on Your Books: Factoring is the sale of an asset, not a loan, keeping your balance sheet clean
Easier Qualification: Approval is based on your customers' credit, not yours — ideal for startups or businesses with less-than-perfect credit
Outsourced Collections: The factor handles collections, freeing your team to focus on growing the business
Scales with Your Revenue: As your invoicing grows, your factoring line grows automatically — no need to reapply
No Long-Term Contracts: Many factors offer month-to-month or spot factoring with no long-term commitment

Typical Rates & Terms

Advance Rate: 80–95% of invoice face value (industry and customer credit dependent)

Factoring Fee: 1–5% of the invoice value per 30-day period

Contract Terms: Month-to-month, 6-month, or 12-month agreements available

Funding Speed: 24–48 hours after invoice verification (same-day for established accounts)

Volume: $10K to $10M+ per month in factored invoices

*Rates vary by factor and depend on invoice volume, customer creditworthiness, industry, and payment terms.