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, you factor the invoice (or promised reseller payment) an invoice factoring company for a small fee, called a factoring fee, which usually ranges from 1-8%. In return, you get immediate access to working capital in the form of an advance, which may be as high as 98% of the invoice or payment amount – or even higher, depending on your factoring agreement. Once your customer remits payment for the invoice, if any amount has been held in reserve, it will also be released back to you.
We would love to help you find a factoring company that offers low fees, high advances and flexible terms that can be tailored to the unique needs of your business. Reach out for a free, no-obligation quote or apply online at no cost.