Invoice financing is a business-to-business transaction that provides a company the ability to leverage unpaid 30, 60 and 90 day invoices to obtain specialized short-term business financing before your customer actually pays the invoice. With invoice financing (often called other terms like “factoring”, “invoice factoring”, “accounts receivable factoring”) a lender will provide specialized asset-based financing by using your business’s unpaid invoices as collateral to advance your company between 70-92% of the invoice’s total dollar value. When the factoring lender provides your company or small business the initial advance they will charge you a fee (usually between 1-3 of the total invoice, along with an additional fee added each week) and hold the rest until the invoice is paid. Once the invoice is paid-in-full, the remainder of the invoice amount is released to your small business.
Rather than relying on your company’s creditworthiness to secure financing, invoice financing companies actually look more at the creditworthiness of your costumer, as it is their future payment they are buying at a discount. Invoice factoring company’s will usually only advance commercial and government invoices (meaning that they tend not to buy invoices in which the company whose invoice they are buying sells products to consumers rather than other businesses. Most small business factoring companies offer small companies the ability to “spot factor” a single invoice — a one time factoring transaction in which the relationship between the business and factoring company ends when the invoice is paid — as opposed to traditional factoring where there is a continued relation beyond a single invoice.
There are many advantages in deciding to factor your invoices as compared to other forms of business and commercial financing. Factoring your company’s invoices allows you quick access to needed cash without having to present the factoring company all of your business and personal financial statements. The funding process when selling invoices is about as fast as a merchant cash advance and other short term business loans — which usually take between 1-4 days to fund, without having as high of a rate as those financing options. While credit is a factor in making a final decision whether or not the factoring company will purchase your company’s invoices, its not the only factor in the decision. In fact, what matters more to the purchaser of the invoice is the creditworthiness of the debtor of the invoice.
Rather than relying on your company’s creditworthiness to secure financing, invoice financing companies actually look more at the creditworthiness of your costumer, as it is their future payment they are buying at a discount. Invoice factoring company’s will usually only advance commercial and government invoices (meaning that they tend not to buy invoices in which the company whose invoice they are buying sells products to consumers rather than other businesses. Most small business factoring companies offer small companies the ability to “spot factor” a single invoice — a one time factoring transaction in which the relationship between the business and factoring company ends when the invoice is paid — as opposed to traditional factoring where there is a continued relation beyond a single invoice.
There are many advantages in deciding to factor your invoices as compared to other forms of business and commercial financing. Factoring your company’s invoices allows you quick access to needed cash without having to present the factoring company all of your business and personal financial statements. The funding process when selling invoices is about as fast as a merchant cash advance and other short term business loans — which usually take between 1-4 days to fund, without having as high of a rate as those financing options. While credit is a factor in making a final decision whether or not the factoring company will purchase your company’s invoices, its not the only factor in the decision. In fact, what matters more to the purchaser of the invoice is the creditworthiness of the debtor of the invoice.
Invoice Factoring
Our Lending Partners Advantages over the Competition:
Minimum qualifications
What you need to begin application process
- Nationwide and all industries
- Advances up to 95%.
- Rates start at .55%.
- $25,000 to $ 10 Million.
- Fund in 24 to 48 Hours.
- Non-Recourse.
- We work with start-ups
Our Lending Partners Advantages over the Competition:
- Flexible Terms - Financing terms are counted by days, as flexible as your credit needs.
- Competitive rates - Daily invoice financing rates are lower than other companies.
- Transparency - Our set-up fee and daily factor rate are specified clearly
- No set-up fee for repeated customers.
- High credit limits
Minimum qualifications
- FICO 600+
- B2B business with 2+ years tax return
- $1,000,000 + annual revenue
What you need to begin application process
- Your business basic information
- Recent 6 months bank statements
- Details about the invoice and your customers
