Stop Waiting 30, 60, or 90 Days to Get Paid

Invoice factoring lets businesses that sell to other businesses convert unpaid invoices into immediate working capital. Instead of waiting 30, 60, or even 90 days for customers to pay, you sell the invoice to a factoring company at a discount. The factor advances a large share of the invoice value upfront -- typically 80 to 95 percent -- and releases the remainder, minus its fee, once your customer pays. Because factoring is generally structured as the sale of an asset rather than a loan, approval decisions weigh the creditworthiness of the customers who owe the invoices more heavily than your own credit profile or time in business. That makes factoring one of the most accessible funding tools for newer companies, businesses recovering from credit problems, and fast-growing firms whose receivables outpace their cash. Factoring fees commonly run about 1 to 5 percent of the invoice value per 30 days outstanding, depending on your volume, your industry, and how quickly your customers pay. Arrangements may be recourse, where you remain responsible if a customer ultimately does not pay, or non-recourse, where the factoring company absorbs approved credit losses in exchange for a somewhat higher fee. Businesses across trades and services rely on factoring: contractors invoicing general contractors, agencies billing insurers, wholesalers waiting on retail chains, and service firms carrying large receivable balances. Once an account is established, many factoring companies fund newly submitted invoices within 24 to 48 hours of verification, turning your receivables into a repeatable source of operating cash.