Get paid for the work you have already delivered.
The job is finished and the invoice is out. Waiting 60 days to collect is a loan you gave your customer for free. Factoring turns that invoice into cash now.
What factoring does
The work is done. The money is not.
A crew finished the job. Materials were bought, hours were worked, and the invoice went out on terms the customer set. Now the business waits thirty, sixty, sometimes ninety days to be paid for work it has already funded.
Payroll does not wait with it. Neither does the next job, which gets turned down because the money to start it is tied up in the last one. The business is not short of work or short of profit. It is short of timing.
Factoring is how businesses in these industries have solved that for decades. It is not a distress signal. More often it is the opposite, because the businesses that need it are the ones winning more work than their cash can carry.
What invoice factoring is
You sell an unpaid invoice rather than borrowing against it. Most of the value comes to you now, the rest when your customer pays, less the fee.
Four steps, and the first one is something you already do.
You invoice the customer
Exactly as you do now. Nothing about how you bill or who you bill changes.
We advance most of the value
Cash lands in days rather than months, against work already delivered.
Your customer pays us
On their original terms. They are told, and it is a normal arrangement in these industries.
You get the remainder
The rest of the invoice value comes to you, less the fee.
This is not a loan.
The distinction matters more than it sounds. A loan adds debt to the balance sheet, is underwritten against your credit, and has to be repaid whether the job went well or not. Factoring is a sale. You are converting an asset you already hold into cash sooner.
What the arrangement actually looks like.
- Facility size
- Up to $5 million.
- Minimums
- None. There is no commitment to factor every invoice, and no monthly volume you have to hit.
- Advance
- Most of the invoice value, paid in days. The exact percentage is quoted once we have seen your receivables.
- Fee
- A percentage of the invoice, charged per 30 days outstanding. Quoted per business, for the reasons above.
- Who is underwritten
- Your customers, not you. Factoring looks at whether the people who owe you tend to pay.
- Customer notification
- Standard, and routine in these industries. Your customer is told where to send payment. Most have seen it many times and treat it as an administrative change.
- Personal guarantee
- Sometimes required, and scoped narrowly. It covers fraud and performance rather than whether your customers pay their bills.
- Best fit
- Businesses that invoice other businesses and carry labor costs while they wait. Construction and trades, transportation, staffing.
Factoring prices your customers rather than you, so what gets looked at is who owes you and how reliably they pay. That happens during onboarding, not invoice by invoice. Once your terms are set you know what they are, and the only things that change after that are the size of the invoice and how long it stays outstanding. It is quoted per business rather than published because a single number would be wrong for almost everyone.
The other ways businesses cover the gap.
| Invoice factoring | Bank line of credit | Business credit card | Fintech line of credit | |
|---|---|---|---|---|
| Structure | Advance against the receivable | Revolving debt | Revolving debt | Revolving debt |
| Debt on your books | No | Yes | Yes | Yes |
| Speed to funds | Days | Weeks | Same day | Days to weeks |
| Approval based on | Your customers and the quality of the invoice | Business credit, financials, collateral | Personal credit, sometimes business credit | Bank data, revenue, credit |
| Personal guarantee | Sometimes, and scoped narrowly | Often required | Required | Often required |
| What it costs | A fee per 30 days outstanding, quoted per business | Variable APR, often 8 to 15 percent | APR of 20 to 30 percent and up | APR of 15 to 30 percent and up, plus fees |
| Scales with growth | Yes, as your receivables grow | Capped at the credit limit | Capped at the credit limit | Capped at the credit limit |
| Best for | Labor-intensive businesses where payroll runs faster than customer payments | Established businesses with clean financials and collateral | Smaller, recurring operating expenses | Businesses with a strong bank data signal |
Cost ranges for other options are indicative of typical market rates and vary by lender and by borrower. Our own figures are set during onboarding, once we have seen your receivables.
Factoring is not the right answer to every cash flow problem. If you are not sure which of these fits, tell us what the situation is and we will help you think it through.
Where this shows up in the business.
Payroll stops depending on when a customer pays
The people who did the work get paid on schedule, whatever the customer is doing.
The next job stops waiting on the last one
Work you would have turned down for lack of cash becomes work you can take.
Growth stops being punished
Winning a bigger contract usually makes the cash gap worse. Here it makes more cash available.
What businesses ask before they start.
Will my customers know?
Yes, and it matters less than it feels like it should. Your customer is told where to send payment, and that is standard practice rather than something we work around. We would rather you hear it here than discover it later.
In construction, trucking and staffing, the people paying your invoices see this constantly. General contractors, shippers and staffing clients deal with factored invoices as a routine part of accounts payable, including from companies far larger than yours. It reads to them as a business managing its cash deliberately, which is what it is.
Is this a loan?
No. You are selling an invoice rather than borrowing against it. There is no debt on your balance sheet and nothing to repay, because nothing was lent.
Do I have to factor every invoice?
No. There are no minimums and no commitment to put your whole book through. Some businesses factor one customer, or only the invoices that are slow to pay.
What does it cost?
A percentage of the invoice, charged per 30 days it stays outstanding. The figure depends on your customers, your industry and the size of the invoices, so it is quoted once we have seen your receivables rather than published as a single number.
My business is young and my credit is not great. Does that rule me out?
Often not. Factoring underwrites the people who owe you rather than you, so a young business with solid customers is a normal case rather than an exception.
Will I have to sign a personal guarantee?
Sometimes, and it is narrower than the phrase suggests. It covers fraud and performance, so it protects against invoices that were never real or work that was never done. It is not a guarantee that your customers will pay, which is the risk we are taking on. In practice it is almost never called on, because the situations it exists for are rare.
How fast can this be set up?
Days rather than weeks. Tell us who your customers are and what you are invoicing, and we will tell you quickly whether it fits.
See what your invoices are worth today.
Tell us who you invoice and roughly what is outstanding, and we will tell you what could be advanced and what it would cost.
Nothing to prepare, and nothing to commit to.