Small Business Factoring – How the Process Works
Request a free, no obligation quote (or apply online) to determine how much working capital you could unlock by factoring invoices, instead of waiting for customers to pay.
Once you’ve been approved and have factored at least one invoice, receive your first funding in days (or even hours) and get same day funding up to 90% of the invoice amount when you factor invoices after that.
How the Small Business Invoice Factoring Process Works
Invoices factored are typically funded on the same day – up to 90% of the face value of the invoice, with the remainder placed in “reserve” pending customer payment.
For instance, let’s say that you are billing a customer in the amount of $12,000 but you want to access the funds without waiting weeks – or even months – for your customer to pay.
Assuming a factoring fee of 5%, and an advance rate of 90%, here’s how it would work:
|Day 1 –
||Generate $12,000 client invoice and factor it
| – Same Day
||Your company receives 90% advance of $10,800 by wire transfer or ACH
||The factoring company earns 5% factoring fee
||Your company receives any amount held in reserve after the invoice is paid