Turn unpaid invoices into immediate cash by selling them to a factoring company.
Invoice factoring is when you sell your unpaid invoices to a factoring company (factor) for immediate cash. The factor advances you 70-95% of the invoice value upfront, then collects payment directly from your customers. Once customers pay, you receive the remaining balance minus factoring fees (typically 1-5% of invoice value). It's a form of invoice financing where the factor handles collections, making it ideal for businesses that want to outsource accounts receivable management.
Send unpaid invoices to the factoring company. They verify invoices are legitimate and your customers are creditworthy.
Get 70-95% of invoice value deposited within 24-48 hours. This is your immediate cash to cover expenses.
The factoring company handles collections from your customers. Customers pay the factor directly, not you.
Once customers pay, you receive the remaining 5-30% balance minus factoring fees (typically 1-5% of invoice value).
Most common type. If a customer doesn't pay, you're responsible for buying back the invoice or replacing it with another invoice.
Factor assumes credit risk. If customer doesn't pay, factor absorbs the loss (you still pay fees).
Invoice factoring is ideal for:
Factoring fees vary based on invoice volume, customer creditworthiness, and payment terms:
Fees are typically higher than traditional loans but provide immediate cash flow and outsourced collections.
Factoring means the factor collects from customers. Invoice financing (discounting) means you collect and use invoices as collateral. Compare invoice factoring vs business loans to understand your options.
Yes, with factoring, customers pay the factor directly, so they know you're using factoring services. This is different from invoice discounting where you maintain direct customer relationships.
With recourse factoring (most common), you're responsible for buying back the invoice or replacing it. With non-recourse factoring, the factor absorbs the loss, but fees are higher.
Yes, you can factor all invoices or select specific ones. Many businesses start with their largest or slowest-paying invoices to maximize cash flow impact.
Broader overview of invoice-based financing options.
Compare factoring to traditional business loans.
Calculate your cash flow to see if factoring makes sense.
Explore accounts receivable and invoice financing options.
Get immediate cash for your accounts receivable and let us handle collections.
Fast funding • Based on receivables • Collections handled