Invoice Factoring
Invoice factoring turns your unpaid invoices into immediate working capital. Instead of waiting 30, 60, or 90 days for customers to pay, you sell your outstanding invoices to a factoring company and receive up to 95% of the invoice value upfront, often within 24 hours. Rise connects B2B businesses with invoice factoring solutions that keep cash flowing while your customers pay on their own timeline. No new debt on your books. No collateral required. Just the capital your invoices have already earned.
Check Eligibility
What Is Invoice Factoring?
Invoice factoring is a financing arrangement where you sell your outstanding B2B invoices to a third-party factoring company at a discount in exchange for immediate cash. The factoring company pays you an advance, typically 80% to 95% of the invoice face value, and then collects payment directly from your customer. Once the customer pays, you receive the remaining balance minus the factoring fee.
Unlike a business line of credit or term loan, invoice factoring is not a loan. You are selling an asset (your receivable), so no debt appears on your balance sheet. This makes it particularly attractive for businesses with long payment cycles . Manufacturing companies waiting on net-60 terms, staffing agencies billing monthly, and service businesses with slow-paying enterprise clients.
Approval is based primarily on your customers' creditworthiness, not yours. Use our business loan calculator to compare factoring costs against other financing options.
Requirements to Qualify for Invoice Factoring
Personal FICO Score
No minimum required
Invoice factoring approval is based on your customers' credit, not yours. Even businesses with poor personal credit can qualify if their clients pay reliably.
Monthly Revenue
$5,000+ in B2B invoices
You need outstanding invoices from creditworthy business customers. Consumer (B2C) invoices typically do not qualify for factoring.
Time in Business
No minimum (startups welcome)
Factoring companies evaluate your invoices and your customers' payment history, not how long your business has been operating. Startups with B2B clients can qualify from day one.
Invoice Quality
Creditworthy B2B customers
Invoices must be for completed work or delivered goods to established business customers. Invoices that are past due, disputed, or owed by consumers typically do not qualify.
Not sure if your invoices qualify? Rise evaluates your receivables and your customers' payment patterns to find the right factoring arrangement. Businesses across industries with B2B invoices are welcome, including healthcare practices waiting on insurance reimbursements and construction companies with progress billing.
How Invoice Factoring Works
Submit Your Invoices
After completing work or delivering goods, you submit your outstanding invoices to the factoring company. You choose which invoices to factor. You can factor all of them or only the ones where you need faster payment.
Receive an Advance (80% to 95%)
The factoring company verifies the invoices and advances you 80% to 95% of the face value, typically within 24 hours. This immediate cash injection replaces the 30 to 90 day wait for customer payment.
Factoring Company Collects Payment
The factoring company takes over collection from your customer. Your customer pays the factoring company directly according to the original invoice terms. This removes collections from your workload entirely.
Receive the Remaining Balance
Once your customer pays the full invoice, the factoring company sends you the remaining balance (5% to 20%) minus their factoring fee. The fee typically ranges from 1% to 5% of the invoice value depending on volume and customer credit quality.
See If You Qualify in Minutes
Find out how much working capital your invoices can unlock. The application takes less than 5 minutes and won't impact your credit score.
Pros & Cons of Invoice Factoring
Pros
Immediate Cash From Unpaid Invoices
Convert 30, 60, or 90-day receivables into same-day capital. Stop waiting for customers to pay before you can cover expenses or invest in growth.
No New Debt on Your Balance Sheet
Factoring is a sale of receivables, not a loan. Your debt-to-equity ratio stays clean, which matters if you plan to pursue traditional financing later.
Approval Based on Customer Credit, Not Yours
Your personal credit score is largely irrelevant. If your customers are creditworthy businesses that pay reliably, you can qualify even with poor personal credit.
Outsource Collections
The factoring company handles follow-up and collection from your customers, freeing your team to focus on operations and revenue generation rather than chasing payments.
Scales With Your Business
As your invoicing volume grows, your available funding grows automatically. There is no need to renegotiate a credit limit or reapply for a larger loan.
Cons
Factoring Fees Reduce Your Margins
Fees of 1% to 5% per invoice reduce your effective revenue. For low-margin businesses, this cost needs to be weighed against the value of faster cash flow. A business line of credit may offer a lower cost for businesses that qualify.
Customer Relationship Impact
Your customers will know a third party is collecting on your invoices. Some businesses perceive this as a sign of financial difficulty. Choose a factoring company with professional, discreet collection practices.
Only Works for B2B Invoices
Factoring requires invoices to creditworthy business customers. If your revenue comes primarily from consumers (B2C), factoring won't work. Consider a merchant cash advance or short-term loan instead.
Alternatives to Invoice Factoring
- Revolving access to funds without selling your invoices
- Pay interest only on what you draw, resulting in lower cost for qualified businesses
- You retain full control of customer relationships and collections
- Requires stronger credit profile and longer operating history
- Better for businesses that want ongoing access rather than invoice-by-invoice funding
- Lump sum capital with fixed repayment over 3 to 18 months
- No third-party involvement with your customer relationships
- Predictable payment schedule regardless of invoice timing
- Requires stronger credit and revenue documentation
- Better when you need a specific amount for a defined purpose
- Repayments scale with your monthly revenue automatically
- No invoices needed; works for B2C and B2B businesses alike
- Fixed repayment cap so you know total cost upfront
- No impact on customer relationships
- Better for businesses with consistent revenue but no large outstanding invoices
Frequently Asked Questions About
Invoice Factoring
Invoice factoring is a financing method where you sell your unpaid B2B invoices to a factoring company in exchange for immediate cash, typically 80% to 95% of the invoice value. The factoring company then collects payment from your customer and sends you the remaining balance minus their fee once the customer pays.
Trusted by Small Businesses Across the USA
Fast Approval
As Little As 2 Hours
Funding Available
Up to $500,000
Businesses Funded
Across All 50 States
Invoice Factoring in Your State
Available across all 50 states and Washington, D.C. Pick your state to see local programs, qualification specifics, and state-tailored FAQs.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Turn Your Invoices Into Working Capital
Stop waiting 30, 60, or 90 days for customers to pay. Factor your invoices today and get funded within 24 hours. No debt, no collateral, no credit score requirements.