- Overview of the Invoice Factoring Process
Your business sells products or services to another business or organization. For each order fulfilled, an accounts receivable invoice is generated.
How does invoice factoring work to speed up business cash flow? Rather than managing the invoice yourself and then waiting weeks or even months for your customer to make payment, you can choose to use invoice factoring (also known as receivables financing or accounts receivable factoring) and gain immediate access to working capital.
When you factor invoices with Corsa Finance, you may be able to receive immediate access to as much as 90% of the full amount of each invoice factored. This is money that might otherwise be tied up for weeks or even months as a receivable. The remainder is placed in reserve, pending payment of the invoice by your customer.
Once your customer has submitted payment and the amount of the invoice is satisfied, any amount held in reserve is forwarded to you as well. A low factoring fee (which could 5% or lower) will be your company’s all-in cost for this type of financing in most cases, depending on the details of your factoring agreement.