Guide
Factoring sells a specific receivable at a discount. The products here advance against overall revenue instead.
✓ Comparing factoring with our products does not affect your credit score.
If your revenue is invoice-based on 30 to 60 day terms, factoring can be cheaper per dollar because the factor is underwriting your customer, not you.
The trade-offs: your customer usually learns about it, pricing is per invoice, and concentration with one large customer can disqualify you.
A line of credit here is customer-blind and revolving, which suits a business with many small receivables rather than a few large ones.
Compare the two on cost per dollar over the actual collection period, not on the headline rate.
Factoring leans on your customers' credit; our products lean on your own bank activity, and there is no hard score cutoff. The 650, 600 and 550 tiers set which product a file is read against, not whether it can be funded. Scores in the 500s are placed routinely and are judged on revenue, deposit consistency and time in business instead of the score alone.
Note that real estate agents, brokers, managers and lessors are restricted here regardless of receivable quality.
Factoring prices are quoted as a percentage per period, which hides how much the time your customer takes to pay matters.
Illustrative only. A factor advances 85% ($17,000) when you submit the invoice and charges 1.5% per 15 days the invoice is outstanding.
| Customer pays in… | Fee | You receive in total |
|---|---|---|
| 15 days | 1.5% = $300 | $19,700 |
| 30 days | 3.0% = $600 | $19,400 |
| 45 days | 4.5% = $900 | $19,100 |
| 60 days | 6.0% = $1,200 | $18,800 |
The remaining 15% reserve ($3,000) comes back minus the fee once the customer pays. Slow-paying customers make factoring progressively more expensive, so check your customers’ real payment history, not their stated terms.
With recourse factoring, you buy the invoice back if the customer does not pay. Non-recourse shifts some of that risk to the factor, usually for a higher fee and only for specific reasons such as customer insolvency. Read which events are covered.
Most factoring is “notification” factoring: your customer is told to pay the factor directly, and the factor may contact them to verify invoices. If a client relationship is sensitive, ask whether non-notification factoring is offered and what it costs. Also check for monthly minimums, termination fees and whether you must factor every invoice from a customer or can choose.
If a single large invoice is the issue, a line of credit draw is often simpler: you keep collecting from your own customer and repay the draw when paid. Compare both in invoice factoring vs merchant cash advance and funding for professional services firms.
Line of credit from 1% per month on the drawn balance, 2.49% per draw. Term loan 0% origination on weekly payments. Refinance priced with a factor rate.
Factoring leans on your customers' credit; our products lean on your own bank activity, and there is no hard score cutoff. The 650, 600 and 550 tiers set which product a file is read against, not whether it can be funded. Scores in the 500s are placed routinely and are judged on revenue, deposit consistency and time in business instead of the score alone.
A complete file gets a same-day decision and next-business-day funding — usually faster than setting up a factoring account.
Yes, up to two existing positions.
Get a same-day decision to set beside a factoring quote; applying takes a few minutes and leaves your credit score alone.
