Invoice Factoring For Small Businesses
Improve your cash flow now by turning unpaid invoices today into capital you can use tomorrow.
Turn Remaining Invoice Balances Into Capital, Fast.
Fuel Your Business Growth
Unpaid invoices disturbing your cash flow? Turn them into capital in as little as 48 hours with invoice factoring with Credibly.
$1.5+B in Business Funding Granted
Credibly is proud to have helped over 30,000 small American businesses realize their potential by funding over $1.5B.
The Credibly Advantage
To our loan experts, your business’s value isn’t defined solely by your credit score and P&L. We’ll look at your overall health and potential to forge a partnership instead of a mere transaction.
Speak to an Invoice Factoring Expert
What Our Customers Say About Our Invoice Factoring Services
“I turned to Credibly because it seemed as though it was going to be easy, and it turned out to be quite simple. Applying for bank loans can be very time-consuming and intensive, and I thought this would be a great new way to get capital. We had just received a new commission for a pretty large hotel project, and I was able to feel comfortable hiring staff and buying equipment that we needed. I found it super effective for us, and would recommend Credibly to other architects or other small business owners in a heartbeat.”
Mark VanderZanden
Surround Architecture, Inc.
What is Invoice Factoring, and How Does It Work?
Max Advance
Up To $400,000
Pre-qualify For Up To $400,000
Convert pending invoices into upfront cash easily. Invoice factoring doesn’t just unlock capital when you need it, it gives you the flexibility to use it as you need:
✔ Equipment, inventory, or supplies
✔ Employee salaries
✔ Short-term projects
✔ Repair emergencies
Get Invoices Paid out Fast
As Little As 1-2 Days
Never Wait Months For Payments Again
Rather than waiting 30 to 120 days for your customers to pay you, invoice factoring provides you with a fast business loan within 1-2 business days.
Rather than waiting 30 to 120 days for your customers to pay you, invoice factoring provides you with a fast business loan within 1-2 business days.
✔ Apply in just 10 minutes
✔ Get approved in as little as one day
✔ Receive the funds in your account within 48 hours
How It Works
The 411 On Invoice Factoring
How Does Invoice Factoring Work?
And how can it help you maintain a stable cash flow and protect your annual revenue?
✔ Small business owners sell outstanding invoices to factoring companies (the factor) at a discounted rate
✔ The factor advances a lump sum up to 95% of the value of the invoice
✔ The factor then collects all payments directly from the client
✔ The factor sends the remaining balance to the business, minus any factoring fee, which is typically an agreed-upon percentage
Have a question about how this works? Our loan experts are happy to help.
Factor Rates
As Low As 1.09
Funds That Allow You to Grow
We don’t just see you as a P&L sheet, we see the potential behind your business. Get business financing that lets you grow, not owe:
✔ Holistic approach to approval that assesses the number of invoices, type of industry, creditworthiness, and other factors
✔ Factoring fees between 0.5% and 4.0% that reflects your business, not just a credit score
✔ No surprise fees: we’ll tell you when fees may be charged and how much
How to Apply for Invoice Factoring
Step 1
Pre-Qualify Online
Pre-Qualify Online
Click “Get Started” and enter some basic business information to pre-qualify.
Step 2
Approval in as little as 4 Hours
Approval in as little as 4 Hours
We’ll review your application in as little as one day and reach out to you with the best financing options, be it invoice factoring or another lending option.
Step 3
Receive Same-Day Funding
Receive Same-Day Funding
If approved, you can get the entire amount deposited directly into your account on the same day.
Invoice Factoring Loan Advantages and Disadvantages
Is factoring right for your business? Factoring is ideal for businesses that regularly have outstanding invoices and experience cash flow issues as a result.
Pros
- Invoice factoring provides a safe, immediate source of cash flow by releasing working capital that is tied up in unpaid invoices, without any hidden fees.
- Having a lender collect invoices for you allows you to save time otherwise spent on administrative tasks and chasing late payments.
- It can provide flexibility as amounts, and payment terms can expand and contract with your sales volume.
Cons
- Invoice factoring companies will verify your invoices with clients to ensure that they’re accurate. Including a third party can affect customer relationships and also means that you will have to give up some control.
- If your client has a weak payment history or credit score, your approval may be affected; factoring companies prefer to avoid the risk of non-payment.
- Invoice factoring can reduce the scope of additional borrowing and the factoring fee is often higher than the fees associated with a longer-term loan.
Working Capital Formula = Current Assets – Current Liabilities
Current assets are the tangible and intangible items that your company owns and can be easily turned into cash within one business cycle. Along with your checking and savings account, this includes things like accounts receivable, highly liquid marketable securities, inventory, and other shorter-term prepaid expenses.
Current liabilities include all of the debts and expenses firms expect to pay within one business cycle. This typically includes all of the normal costs associated with running a business: utilities, rent, matierials and supplies, interest and principal payments on debt, accounts payable, and accrued liabilities and income taxes.
Other Lending Options Credibly Offers
Long-Term Business Loans
Plan for the future with flexible, worry-free long-term loans.
Learn more >
Why Credibly for Invoice Financing?
21st Century Financing For 21st Century Businesses
Work with Credibly and say “No” to reams of paperwork, weeks of waiting, and surprise fees.
We’ll give you upfront answers and upfront capital so you can get back to doing what you want to—growing your business.
We Like Supporting Small Businesses Like Yours
With more than 30,000 businesses funded across the USA and a 4.8 TrustPilot rating, we put our money where our mouth is.
10 minutes
To pre-qualify for funding using our simple online application
30,000+
Businesses around the USA financed by Credibly
4.8
Rating on TrustPilot
$1.5B+
In funding provided by Credibly
FAQs About Invoice Factoring
+
How does invoice factoring work?
To factor an invoice is to sell it to a lender in return for a discounted cash advance. The lender then collects the unpaid invoice from your customers on your behalf.
Unlike a traditional loan, invoice factoring allows you to access funding without taking on the burden of periodic fixed payments associated.
+
Is invoice factoring a kind of bank loan?
Invoice factoring and loans are two different types of financing. Unlike a traditional bank or business loan, factoring allows you to release untapped working capital from your accounts receivable to instantly improve your cash flow.
+
What is the difference between invoice factoring and invoice discounting?
Invoice factoring is when a business sells its unpaid invoices to a third party, after which that third party (the factoring company) then controls the sales ledger and collects the debts.
Invoice discounting also allows you to draw money against your invoices, but in this case, your business maintains control over the administration of your sales ledger.
+
Invoice financing and invoice factoring: What’s the difference?
The main difference between invoice factoring and invoice financing is which party is responsible for collecting the unpaid invoices.
Invoice financing (also called accounts receivable financing): the customer retains full control of collections, not the financing company
Invoice factoring: the factoring company purchases the unpaid invoices and takes over the collections process
Invoice factoring: While it may be helpful to have the lender collect unpaid invoices on your behalf, understand that you will have less control over the collections process and that your clients may become aware of your cash flow shortages, which could affect your customer service reputation
+
What are the different types of invoice factoring?
There are two main types of invoice factoring: recourse and non-recourse factoring.
Recourse factoring is the most common type of invoice factoring in the United States. It involves an agreement between businesses and invoice factoring companies (“factors”) that, in the event that the businesses’ customers do not pay their invoices, the businesses themselves will be responsible for compensating the factors.
With non-recourse factoring, the factors assume all of the risks; even if customers fail to pay, the business owners do not owe anything to the factors.
+
How much does invoice factoring cost?
The fees depend on a variety of factors, such as the creditworthiness of your business and your clients, the number of invoices you plan on submitting for financing, and even the type of industry your business is in.
A typical factoring fee is, however, between 0.05% and 4%. Additional fees can include:
Monthly Minimum Fees
If a business produces less than ideal results after a credit check, factors may require that business to commit to submitting a minimum monthly invoicing amount or charge additional fees.
Maintenance Fees
Many factoring companies charge businesses a (usually monthly) fee to keep their accounts running and open.
Termination Fees
If a business owner signs a long-term contract and desires to terminate their invoice factoring agreement, there may be cancellation or termination fees, which will typically run a business a small percentage of their credit line.
Due Diligence Fees
Sometimes, a factor will check into the reliability of a business’ clients beyond face value (e.g., the clients’ creditworthiness, whether they have any liens against them, etc.). Each time the factor performs this check, it may charge the business a due diligence fee, which typically ranges in cost from a few hundred dollars to several thousand.
Pre-Qualify for an Invoice Factoring Service
Apply now and receive approval in as little as one business day
Certain products may not be available in all states.
Certain business loan products are made available through Retail Capital LLC, a licensed California Finance Lender.
© Copyright 2022 - Credibly