How much of an invoice can I get advanced?

Typically seventy to ninety percent of the invoice value up front, with the reserve released once your customer pays, less the factoring fee. Trucking and staffing sit at the higher end; construction progress billing at the lower end.

Will my customers know I am factoring?

Usually yes. Most factoring is notified: the factor verifies the invoice and your customer remits payment to the factor. Confidential factoring exists at a higher cost and stricter qualification.

No. It is the sale of a receivable at a discount, so it does not add debt to your balance sheet in the way a loan does. That also means the cost is a fee, not an interest rate.

What if my customer never pays?

Under recourse factoring — the usual structure — you repurchase the invoice or replace it with another. Non-recourse shifts defined credit risk to the factor for a higher fee, and typically excludes disputes over the work.

Funding solution

Invoice Factoring for B2B Businesses

Invoice factoring converts unpaid B2B invoices into cash: a factor advances up to about 90% of the invoice value, collects from your customer, then remits the balance minus a fee. Pricing is a fee, not an APR. BusinessLending360 matches your request with options from 1,700+ funding sources.

Typical range: Up to 90% of eligible invoice value

How invoice factoring works

You sell an unpaid invoice, or a schedule of invoices, to a factoring company. The factor verifies that the work was delivered and that the customer accepts the invoice, then advances a share of the face value — commonly seventy to ninety percent depending on industry and customer quality.

When your customer pays on the original terms, the factor releases the reserve balance to you, less its fee. That fee is typically stated as a percentage of invoice value per thirty-day period, so an invoice that pays late costs more than one that pays on time.

Approval focuses on your customers rather than on you. A young business invoicing creditworthy commercial or government customers can qualify where a cash-flow loan would be declined, because the factor is relying on the customer's ability to pay.

Recourse factoring is the standard structure: if your customer never pays, you buy the invoice back. Non-recourse factoring shifts defined credit risk to the factor for a higher fee, and generally covers customer insolvency only — not a dispute over your work.

Rates and costs

Factoring is priced as a fee, not as an annual interest rate. Fees commonly start around one percent of invoice value per thirty days and rise with longer payment cycles, smaller invoices, concentrated customers or industries with a history of disputes.

The fee is not directly comparable to an APR: a one percent fee on a thirty-day invoice is far more expensive on an annualised basis than a one percent monthly interest rate would suggest. Also confirm whether the agreement carries monthly minimums, a facility fee, wire or ACH charges, and a notice period to exit.

Factoring is priced as a fee on the invoice value, not an APR, so it is not directly comparable to an interest rate. Fees are set by each factor and vary by customer quality, invoice size and payment terms.

Amounts and terms

Typical advance rate: 70% – 90% of eligible invoice value
Cost basis: Monthly fee rate on invoice value (fee, not APR)
Term: Until the invoice is paid; facilities often 6 – 12 months
Repayment: Your customer pays the factor directly
Typical funding speed: 24 – 72 hours after invoice verification
Collateral: The receivables themselves, secured by a UCC filing

How to qualify

You invoice other businesses or government agencies on net terms.
Roughly 3+ months in business, with newer companies often accepted.
Creditworthy customers — their payment history matters most.
Invoices for work already delivered and accepted, free of liens.
No existing UCC filing on receivables, or a subordination in place.

Pros and cons

Approval is driven by your customers' credit, not only yours.
Cash typically arrives within one to three days of verification.
The facility scales automatically as your invoicing grows.
No fixed monthly loan payment is added to the business.

The effective annualised cost is high relative to a term loan.
Your customer usually learns you are factoring during verification.
Recourse means you repurchase invoices your customer never pays.
Agreements can include monthly minimums and notice periods.

Common use cases

Staffing or trucking firms paying crews before customers pay
Manufacturers buying materials for the next order
Suppliers waiting on net-60 or net-90 commercial terms
Government contractors bridging slow payment cycles

Alternatives to consider

Related guide: read the full breakdown.

Frequently asked questions

How much of an invoice can I get advanced?: Typically seventy to ninety percent of the invoice value up front, with the reserve released once your customer pays, less the factoring fee. Trucking and staffing sit at the higher end; construction progress billing at the lower end.
Will my customers know I am factoring?: Usually yes. Most factoring is notified: the factor verifies the invoice and your customer remits payment to the factor. Confidential factoring exists at a higher cost and stricter qualification.
Is factoring a loan?: No. It is the sale of a receivable at a discount, so it does not add debt to your balance sheet in the way a loan does. That also means the cost is a fee, not an interest rate.
What if my customer never pays?: Under recourse factoring — the usual structure — you repurchase the invoice or replace it with another. Non-recourse shifts defined credit risk to the factor for a higher fee, and typically excludes disputes over the work.

Terms shown are published by each company and may change. Company names and logos are the property of their respective owners and are shown for comparison only — they are not partners of BusinessLending360 and no endorsement is implied. BusinessLending360 is not a bank or a direct lender; this is not an application for credit and not an offer of credit, and funding, approval, rates or terms are not guaranteed. Information you submit is handled as described in our Privacy Policy.