Invoice Factoring
Turn unpaid B2B invoices into cash within days. Approval rests on your customers' credit, not yours.
Updated September 2026. Details vary by lender and change often; confirm terms with the provider.
How it works
You sell an invoice to a factor. They advance 80–95% immediately, collect from your customer when it is due, and send you the balance minus their fee.
| Typical range | |
|---|---|
| Advance rate | 80% – 95% of invoice value |
| Fee | 1% – 5% of invoice per 30 days |
| Speed | 24–72 hours after setup |
| Minimums | B2B or B2G invoices, creditworthy customers, often $10k+/month in invoices |
Who it fits
- Staffing, trucking, construction subs, wholesalers, manufacturers, government contractors: anyone who delivers now and gets paid in 30–90 days.
- Fast-growing companies whose receivables grow faster than their cash.
- Owners with weak personal credit but strong customers.
The math
A $50,000 invoice, 90% advance, 2.5% fee per 30 days, paid in 45 days: you get $45,000 today and about $3,100 later, paying $1,875 for the money. Compare that to the advance cost calculator before choosing an MCA to cover the same gap.
Watch for
- Long-term contracts with minimum volume commitments.
- Fees that keep ticking daily after 30 days.
- “Spot factoring” (one invoice at a time) is available and flexible; ask for it if you only need it occasionally.
Frequently asked questions
Will my customers know?
With traditional factoring, yes: the factor collects the invoice and your customer pays them. Invoice financing (a loan against invoices) keeps the relationship private but usually costs a bit more and needs stronger credit on your side.
Recourse or non-recourse?
Recourse means you buy back invoices your customer never pays; it is cheaper. Non-recourse shifts that credit risk to the factor for a higher fee, but usually only covers customer insolvency, not disputes.