What are the benefits of factoring receivables?

Faster cash flow might be the main benefit of factoring receivables, but it’s not the only benefit this financing tool has to offer.

Factoring can help you grow your business more quickly in many ways.

Creating faster, more consistent cash flow is the primary benefit clients seek when they factor invoices, but they may do so to enjoy many different benefits of factoring; such as:

  • Freeing up working capital needed for business growth initiatives
  • Leveraging improved cash flow for better terms with suppliers
  • Offering customers more generous terms as a competitive advantage
  • Unlocking the working capital needed to take on larger accounts or big orders
  • Eliminating the negative consequences of slow-paying customers
  • Improved ability to meet operating expenses and payroll
  • Funding capital expenditures like equipment purchases, repairs, renovation or expansion

Nearly any type of B2B (business-to-business) seller may be eligible to access the benefits of factoring receivables, including those that invoice customers for payment as well as other business models, such as manufacturers and third party sellers whose goods or services are sold through ecommerce retail sites, app stores and other resellers.

Contact us using the quick quote form for more information about factoring receivables or to get a free, no-risk quote.


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Get paid within 1-2 business days of when a customer invoice is generated instead of weeks — or months — later.


Factoring enables you to stay focused on growing your business instead of chasing customer payments.


Extend generous credit terms to your customers and take vendors up on quick pay discounts.

Benefits of Factoring Receivables – Receivables Financing Scenario

Receivables financing scenario: ABC Manufacturers recently shipped their customer an order in the amount of $23,000.  Here’s how the receivables factoring process works assuming a 4% factoring fee and 93% advance rate:

$23,000 invoice, factored the same day it’s generated
– $920 factoring fee
– $690 reserve, or holdback

$21,390 same/next day advance
+ $690 reserve released to ABC after the customer makes payment in full

ABC invoices their customer for $23,000, factors the invoice, and gets an almost immediate advance of $21,390 ($3,000 invoice amount – 4% factoring fee and 3% reserve).  Then, once the invoice has been paid by their customer, ABC also receives the $690 held in reserve.

Working capital in hand, ABC can stay focused on replenishing inventory, paying workers, and taking on the next big customer order. No more chasing customer payments or sitting on the sidelines waiting for payments to come in so you can reinvest in business growth!

Invoice Factoring Calculator

Use the factoring calculator below to discover how much working capital you could unlock by factoring receivables instead of waiting weeks – or months – for customers to pay you.

Find out whether factoring receivables could help your business grow faster:

Leverage the Benefits of Factoring Receivables

Your company provides a product or service to another business, government agency or another type of organization, or your goods or services are sold through another platform.

Upon fulfillment, either an accounts receivable invoice is created or promise of future payment is made to you by a third party (yes, retainers may also qualify!)

Instead of having to wait for weeks or months to receive payment, factor the invoice (or promised reseller payment) for a small fee, called a factoring fee.

In return, you get nearly immediate access to working capital in the form of an advance, which may be as high as 95% of the invoice or payment amount – or even higher, depending on factors such as the credit worthiness of your customer, how often you factor invoices, the size of the invoice, and more.

Receivables are a valuable asset! You can leverage unpaid customer invoices to grow your business.

Invoice factoring enables your company to expedite cash flow by turning the money customers owe you into available cash. Rather than waiting weeks – or months – for customer invoices to be paid, you can receive cash for factored invoices immediately.

Another benefit of factoring receivables is that it enables you to offer more appealing credit terms to your clients without slowing down organizational cash flow, which may provide your business with a competitive advantage.

Invoice factoring allows your business to enjoy immediate access to working capital and replenishes cash flow more quickly, which makes managing your day to day expenses much easier. You might also be able to leverage faster cash flow to negotiate better terms with your organization’s vendors and suppliers.

Plus, unlocking working capital expedites your cash flow on a more consistent basis, giving you the opportunity to confidently pursue bigger clients and new business opportunities.