How Invoice Factoring Works

Invoice factoring is a purchase of accounts receivable, not a loan. This is an important distinction:

• Not a loan - You are selling an asset (your invoices), not borrowing money. No debt is added to your balance sheet.
• Your credit doesn't matter - Approval is based on your customers' creditworthiness, not yours. Bad credit is OK.
• 80-95% advance rate - You receive the majority of the invoice value upfront, with the remainder when your customer pays.
• Funding in 24 hours - Once set up, funding can happen within hours of submitting an invoice.
• Fees vary - Factoring fees are typically 1-5% of the invoice value, depending on volume, industry, and customer credit quality. Compare offers to get the best rate.

Here's what the typical process looks like:

1. Application submitted - You provide basic business information and sample invoices through our free form.
2. Customer credit reviewed - The factoring company reviews your customers' payment history and creditworthiness.
3. Quote provided - You receive a no-obligation quote with the advance rate and factoring fee.
4. Agreement signed - If you accept, you sign a factoring agreement and submit invoices.
5. Funds advanced - Cash is wired to your account, typically within 24 hours of invoice submission.
6. Customer pays - When your customer pays the invoice, you receive the remaining balance minus the factoring fee.

The setup process typically takes 3-5 business days. After that, ongoing funding is same-day. Invoice Factoring Fast connects you with factoring companies at no cost to you.