Looking for the best vendor factoring finance solution?

We’ll help you find the best vendor factoring finance company to work with so you can speed up cash flow, sell more, and grow faster.

Why it’s important to have a great vendor factoring finance partner

Like it or not, a large part of the US retail industry for consumers and business-to-business sellers now does business on third-party platforms (think Amazon, Walmart, Zulily, eBay, Wayfair, Rakuten, Hayneedle, and more — and app platforms like Apple and Google Play). What do these platforms all have in common? As a vendor, you’ll wait weeks (or even months) to get paid.

Yup, whether it’s weeks or even months, as a vendor, you’ll wait to get paid when selling on third-party platforms. However, you can eliminate the wait 100% by factoring invoices, which is why it’s important to work with one of the best vendor factoring companies in the US. This allows you to get paid the same day you receive an earnings statement or generate a receivable invoice.

The factoring company will wait on your payment, while you put the working capital you unlocked on day one back into your business. Speeding up cash flow in this way is the key to growing your business faster. It enables you to reinvest in supplies more quickly, expand inventory or increase production so you can take on bigger orders or sell on multiple platforms, and even cut your own costs with supplier discounts for early payment.

How the process works

You might be wondering how the vendor factoring process works, especially if you’re an e-commerce vendor that doesn’t actually send out invoices. For example, Amazon, Walmart, Wayfair, Zulily, and other e-commerce platform merchants usually don’t submit an invoice to the platform at the end of the month. Instead, they receive an earnings statement.

Also, earnings aren’t paid right away. Third-party platforms may delay sending you the money you’ve earned for 60 to 90 days or more to offset any possible chargebacks, refunds, and other potential issues. So unlike supply chain and manufacturing vendors who sell directly to distributors with net 15 or net 30 terms, you’re waiting up to two months to see your money.

Fortunately, vendor factoring is a finance tool you can use to expedite cash flow. The minute you have an earnings statement (or an accounts receivable a/r invoice) in hand, you can factor it. The factoring company will give you an advance on the earnings statement which could be as high as 98% of the face value of your earnings, and the advance is usually wired the same day you factor (or the next business day, depending on the time of day you submit the earnings statement for factoring).

The factoring company then receives payment from the third-party e-commerce platform (or your customer, in the case of factoring invoices) weeks (or months) later. If any money has been held in reserve, that will also be returned to you once the factoring company has received payment. Here’s a scenario of vendor factoring finance:

DAY ONE

• Your earnings statement for the month (or week or quarter, etc.) is sent to you and you factor it with a top vendor factoring company
• On the same day, you get an advance as a percentage of the earnings total; e.g., a 96% advance on an earnings statement of $36,000 would be $34,560

30-60-90 DAYS LATER

• Once the factoring company has received payment from your customer or the e-commerce platform, they get their fee (which could be as low as 2%, e.g., $720 on a $36,000 earnings statement), and returns any amount held in reserve (called a “holdback”) to you as well

Use the invoice factoring calculator below to see how much money you can access immediately when you factor earnings statements or customer invoices and get an idea of what the factoring fee would be:

How to get started with vendor factoring finance services

It’s easy for vendors to start factoring invoices and earnings statements. The first step is to apply for invoice factoring services. The process of account approval and setup usually takes just a couple of business days. Once your account is set up, you can start factoring earnings statements or invoices from the customers or e-commerce platforms that you’re approved to factor.

All in all, going from application to your first vendor factoring funding could take just a few days, or even less. Complete our invoice factoring application online to get a quote or get vendor factoring services set up and started right away, or get more info as well as a free, no-obligation quote by submitting the short form below. When you do, we’ll connect you with one of the best vendor factoring companies, including:

• Fast funding – often the same day
• Low vendor factoring fees and competitive advances
• Awesome customer service to win your business for the long term
• No minimums – factor only when it’s good for your business
• No long-term contracts or painful, expensive penalties if you decide to stop factoring