What is invoice factoring?
Invoice factoring advances you cash against your unpaid B2B invoices instead of waiting 30, 60, or 90 days for customers to pay. You sell the invoice to a factor, get most of the value immediately, and the factor collects from your customer.
Because you're unlocking money you've already earned, it isn't a loan and doesn't add debt to your balance sheet — approval is based on your customers' creditworthiness, not just yours.
How it works
- You invoice a business customer on net terms as usual.
- Sell that invoice to the factor and receive 80–95% upfront, often within 24 hours.
- Your customer pays the factor on the normal due date.
- The factor releases the remaining balance, minus a small fee.
What it costs
Factoring is priced as a fee on each invoice, typically 1–5% of its value, often depending on how long your customer takes to pay. You receive most of the invoice upfront and the rest, minus the fee, when your customer pays.
Because the fee is charged per invoice rather than per year, compare offers by the fee for your customers' usual payment time, and ask about minimum volumes or monthly fees.
Rates, amounts and terms on this page are typical ranges, not offers or guarantees. Your terms depend on your business and the lender that makes the offer. Cashifi is not a lender and does not make credit decisions.
Best for
- B2B businesses with slow-paying customers
- Staffing, trucking, manufacturing, and wholesale
- Smoothing cash flow without taking on debt
- Businesses with strong customers but thin credit
Pros and considerations
Pros
- + Cash in as little as 24 hours
- + Not a loan — no new debt
- + Approval based on your customers' credit
- + Scales automatically as you invoice more
Considerations
- – Only for businesses that invoice other businesses
- – Your customers may be contacted for collection
- – Fees add up if customers pay slowly
Do you qualify?
- You invoice other businesses (B2B) on net terms
- Creditworthy customers
- Unpaid invoices to factor
- No minimum credit score for many programs
Typically you'll provide: Accounts-receivable aging report, Sample invoices, Customer contact list.
How to apply
- 1Complete one application online — about four minutes, with a soft credit check that won't affect your score.
- 2Upload your recent business bank statements so lenders can see your revenue and cash flow.
- 3Compare the offers that come back, ranked by total cost, and choose the one that fits. There is no obligation.
Frequently asked questions
Is invoice factoring a loan?
No. You're selling your unpaid invoices for immediate cash, so it doesn't add debt to your balance sheet. Approval depends largely on your customers' creditworthiness.
Will my customers know I'm factoring?
In most arrangements the factor collects payment directly, so customers are aware. Some non-notification programs exist for established businesses.
How much of the invoice do I get upfront?
Typically 80–95% immediately, with the remainder (minus a 1–5% fee) released once your customer pays.