Invoice factoring

What is an invoice factoring?

Invoice factoring lets you sell your unpaid invoices to a factoring company. You get most of the invoice value up front, and the factoring company collects payment from your customer.

When your customer pays, you receive the rest of the invoice value, minus the factoring fee. Approval depends mostly on how reliably your customers pay, not on your own credit.

How it works

1. Invoice your customer

   Do the work and invoice your business or government customer as usual.

2. Submit the invoice

   Send a copy of the invoice to the factoring partner.

3. Get your advance

   The partner advances most of the invoice value to your bank account.

4. Your customer pays

   Your customer pays the factoring partner on their normal terms.

5. Receive the balance

   You get the remaining amount, minus the factoring fee.

Documents needed to apply

• Completed and signed application
• Accounts receivable aging report
• Copies of the invoices you want to factor
• Customer list
• Business formation documents and owner ID
• Recent business bank statements

The partner may also verify invoices directly with your customers.

Good for

• Waiting on slow-paying customers
• Taking on larger contracts
• Trucking and freight companies
• Steadying cash flow without taking on new debt