If you invoice other businesses, your cash is often trapped in receivables — you've done the work, but the money is 30, 60, or 90 days out. Invoice factoring and accounts receivable financing free that cash now, so you can make payroll, buy materials, and take the next job without waiting.
How it works
- You invoice your customer as usual.
- You get an advance — typically 80–95% of the invoice value, in as little as two days.
- Your customer pays — and you receive the remainder, minus a small fee.
Factoring vs. A/R financing
With invoice factoring, you sell the invoice and the factor collects payment from your customer. With accounts receivable financing, you borrow against your invoices as collateral and still collect payment yourself. Both convert receivables into working capital — your advisor helps you pick the right structure.
Your customers' credit does the heavy lifting. Because repayment comes from your customers' invoices, approval leans on their reliability — so businesses with imperfect credit but solid customers often qualify easily.
Best for
- Staffing agencies waiting on client payments
- Trucking & freight companies (see trucking funding)
- Manufacturers, wholesalers & distributors
- Any B2B business with net-30/60/90 terms
Typical guidelines
| Requirement | Typical minimum |
|---|---|
| Business type | B2B (invoices other businesses) |
| Invoices | Creditworthy commercial customers |
| Credit score | No minimum on many programs |
| Documents | A/R aging report, application & bank statements |
Frequently asked questions
What is invoice factoring?
Selling your unpaid invoices for immediate cash instead of waiting for customers to pay. The factor advances most of the value and collects payment.
Do I need good credit?
Not necessarily — approval leans on your customers' creditworthiness, so reliable customers matter more than your own score.
How fast is funding?
Often in as little as two business days once your invoices are verified.