Invoice Factoring: Get Paid on Your Invoices in Days

Invoice Factoring: Core Service

Stop waiting 30 to 60 days for customers to pay. You receive 70%–90% of your eligible B2B invoices, with same-day approval and funding in 24 hours once your account is active, without adding debt or pledging hard collateral beyond the invoices themselves.

  • ✓Advance rate: 70%–90% on approved invoices. You receive the reserve after your customer pays, less the agreed fee.
  • ✓Factoring fees from 1% to 3%, set by invoice volume, payment terms, and customer credit quality.
  • ✓Your customers’ credit carries the decision. Your credit score does not decide approval, so startups and poor-credit businesses can qualify.
70%–90%Advance rate on invoices
Same DayApproval on a complete application
24 hrsFunding once your account is active

Estimate your invoice factoring advance

Enter your monthly volume, payment terms and customer profile to see an estimated advance rate and fee.

Executive Summary: Invoice Factoring

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What it is: Invoice factoring is a B2B financing arrangement where you sell unpaid commercial invoices to IFXI’s lending partner in exchange for an immediate cash advance. It is not a loan: no debt goes on your balance sheet, and you pledge no hard-asset collateral beyond the invoices themselves.

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The numbers: Advance rate: 70%–90% of invoice face value · Approval: same day on a complete application · Closing: 2–5 days · Funding: 24 hours once your account is active · Factoring fees: 1%–3% per period · Estimated minimum monthly volume: ~$50,000 · No minimum credit score.

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Key constraints: The lending partner factors B2B invoices only, so consumer receivables do not qualify. Invoices past due more than 90 days, disputed receivables, and accounts carrying an existing UCC lien from another lender are excluded. Under a recourse program you keep liability if a customer defaults.

The Fast Facts on Invoice Factoring

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How fast is invoice factoring funding?

The short answer is same-day approval on a complete application, then a 2–5 day closing and same-day funding on invoices you submit once the account is active. Invoices that reach the lending partner fund by ACH or wire that business day. See same-day business funding.

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What does invoice factoring cost?

Invoice factoring fees range from 1% to 3% of the invoice face value per period. Your rate depends on monthly volume, customer payment terms (net-30 vs. net-60), and debtor credit quality. See how factoring pricing works.

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Who qualifies for invoice factoring?

B2B companies with valid commercial invoices can qualify, including startups with no credit history and businesses a bank has declined. Primary disqualifiers: B2C invoices, disputed receivables, invoices past due more than 90 days, and accounts carrying an existing UCC lien from another lender.

Cash flow gaps invoice factoring can close

Customers paying net-30, net-60, or longer

Slow-paying customers leave you funding work you have already finished. The stretch between paying your costs and collecting on net terms is your cash flow gap, and a bigger client on net-60 terms widens it. Factoring turns approved receivables into cash before your customer’s check arrives, so weekly payroll for temp staff and fuel for the next load get paid on time.

Turned down by your bank

Banks and other lenders underwrite your business credit, collateral, and operating history. Factoring looks first at the invoice and the credit of the customer paying it. Poor-credit and limited-history businesses can qualify when their customers have acceptable credit; see funding without a minimum credit score and eligibility.

Growth stuck behind a credit line

If you have maxed out your credit line or want to avoid the daily debits of a merchant cash advance, factoring gives you working capital against revenue you already earned, with no balloon payment.

How invoice factoring works with your customers

What your customer sees

Each customer receives a Notice of Assignment that tells it to pay factored invoices to the lending partner. Under UCC §9-406, once your customer has that notice, it settles the invoice only by paying as the notice directs.

How the reserve works

The reserve is the 10%–30% of each invoice you do not receive up front. When your customer pays the invoice in full, you receive the reserve minus the 1%–3% factoring fee.

Who uses invoice factoring

Staffing agencies, janitorial and security firms, IT service providers, and owner-operators and small fleets and freight brokers that bill commercial clients on net terms. Startups with creditworthy customers can qualify too; see startup factoring.

Typical Projects

Three ways businesses factor with IFXI

Invoice factoring comes in three common arrangements. How much of your ledger you sell, and how often, changes your advance rate and your fee.

B2B service & product companies

Ongoing factoring

Ongoing factoring is a rolling arrangement: you factor the same customers’ invoices every month. Steady volume usually earns better pricing over time.

Typical monthly volume$100,000 – $1,000,000

Customer termsNet-30 to Net-60

Advance rate88% – 90%

Estimated fee1%–3% per 30 days

First advance2–5 days from application after account setup

What you submit

✓ Current AR aging report

✓ Invoices with proof of delivery or signed work orders

✓ Customer list with contacts for verification

✓ Articles of incorporation and W-9, one time at setup

What delays funding: invoices billed before the work is finished. The lending partner advances on completed, undisputed receivables only.

One-off cash flow gaps

Single invoice & spot factoring

You factor one invoice, or a few, without committing the rest of your ledger. Useful when a single large customer is the reason cash is tight.

Typical invoice size$10,000 – $150,000

Customer termsNet-30 to Net-90

Advance rate80% – 88%

Estimated fee1%–3% per 30 days

First advance2–5 days from a complete file

What you submit

✓ The single invoice and the contract or PO behind it

✓ Proof the goods shipped or the work was accepted

✓ Your customer’s AP contact for verification

✓ UCC search clearance on that receivable

What delays funding: spot deals price higher and verify slower, because one invoice carries all the credit risk. Repeat volume moves you to the first column.

Companies replacing a bank line

Whole-ledger factoring

Whole-ledger factoring places your entire receivables ledger with the lending partner under one facility, with monthly reporting. Businesses use it when a bank line was pulled or outgrown.

Typical monthly volume$1,000,000+

Customer termsNet-30 to Net-90, mixed ledger

Advance rate85% – 90%

Estimated fee1%–3% per 30 days

Funding cycle24 hours once your account is active

What you submit

✓ Twelve months of AR aging and sales ledgers

✓ Year-end financials and interim statements

✓ Customer concentration breakdown

✓ Details of any existing lien on your receivables

What delays funding: heavy concentration in one customer. The lending partner reviews a large single-customer share separately, and it may carry a lower advance.

Not sure which structure fits? Send your AR aging through the quote form, and an IFXI specialist forwards it with your request.

How to get funded with invoice factoring in 3 steps

1

Request your quote

Upload your B2B invoices with an accounts receivable aging report and the supporting documents your trade uses: rate confirmations for freight, timesheets for staffing, or pay applications for construction. An IFXI specialist reviews your request and forwards it the same day.

2

Approval & funding

The lending partner verifies your invoices, checks your customers’ credit and sends the Notice of Assignment. Approval comes the same day and your account closes in 2–5 days. You then receive 70%–90% of each invoice by ACH or wire, inside 24 hours once your account is active.

3

Receive your reserve rebate

Your customer pays the factored invoice according to the Notice of Assignment. After that payment clears, you receive the remaining reserve less the factoring fee.

How money moves in invoice factoring: you request a quote, an IFXI specialist forwards it, the lending partner advances 70% to 90%, your customer pays the lending partner, and you receive the reserve minus the fee.YouIFXI specialistLending partnerYour customer1. Quote request2. Forwarded same day3. Advance of 70%–90%; reserve minus fee after step 4You invoice your customer4. Pays per Notice of Assignment

Funding timeline for invoice factoring

StageTypical Timeframe
Quote request submittedDay 0
Credit review and approvalSame day on a complete application
Account setup and UCC-1 filing2–5 days to close
First invoice funded24 hours after your account activates
Ongoing invoice submissionsSame-day funding
Reserve rebate releasedAfter your customer’s payment clears

Timeline notes for invoice factoring

  • ✓Submit invoices with complete paperwork for same-day funding on an active account.
  • ✓The lending partner files a standard UCC-1 financing statement when your account opens.
  • ✓Under recourse factoring you keep liability if a customer defaults. Non-recourse covers nonpayment for a reason the agreement covers, such as your customer’s insolvency, and prices toward the higher end of the 1%–3% range.
  • ✓Estimated minimum monthly volume: $50,000 per month, varying by program.

Who qualifies for invoice factoring and what you need

RequirementWhat qualifiesNotes
Invoice typeCommercial (B2B) invoices for completed workConsumer (B2C) invoices do not qualify.
Customer creditCustomers with acceptable creditThe credit review looks first at the customers who owe the invoices.
Invoice ageUnder 90 days past dueDisputed receivables do not qualify at any age.
Existing liensNo UCC lien from another lender on your receivablesA tax lien does not rule you out; it gets a case-by-case review.
Monthly volumeEstimated ~$50,000 a monthNo maximum.
Your creditNo minimum credit scoreThe application authorizes business and personal credit reports.

Quote documents for invoice factoring

  • ✓The invoices you want to factor.
  • ✓An accounts receivable aging report.
  • ✓Your trade’s supporting documents: rate confirmations and signed bills of lading, signed timesheets, or approved pay applications with conditional lien waivers.

What delays funding: missing trade documents, an invoice your customer disputes, and an existing lien on your receivables.

Transparent Costs for Invoice Factoring

What to Expect in CostsWhat Affects the Costs
Advance rate: 70%–90% of invoice face value advanced up front.

Factoring fee: 1%–3% of invoice value, assessed when your customer pays.

Reserve: the remaining 10%–30%, released after payment less the fee.		Monthly volume: higher volume earns a lower rate.

Payment terms: net-30 invoices cost less than net-90.

Debtor credit: stronger customers command better rates.

Industry: construction and government work add documentation steps. See pricing.

Worked example: a $50,000 invoice

LineAmount
Invoice face value$50,000
Advance at 80%$40,000
Reserve held (20%)$10,000
Factoring fee at 2%$1,000
Reserve released after your customer pays$9,000
You receive in all$49,000

Illustrative example inside the published ranges. Your quote sets your actual advance rate and fee.

Invoice Factoring vs. Bank Line of Credit vs. Merchant Cash Advance (MCA)

FeatureInvoice FactoringBank Line of CreditMerchant Cash Advance (MCA)
Typical Approval SpeedSame dayEstimated 2–8 weeks1–3 days
Min. Credit Score RequirementNone: debtor-based approvalEstimated 650–700+ (owner personal)Estimated 500+ (owner personal)
Maximum Advance Rate70%–90% of invoice face valueVariable (% of collateral or assets)Estimated 70%–80% of monthly revenue
Debt Added to Balance Sheet?No: you sell a receivableYes: revolving debt liabilityYes: recorded as a liability
Hidden Fees / Covenants1%–3% fee disclosed up frontOrigination, maintenance, annual review, covenantsFactor rates, daily ACH debits, prepayment penalties (Variable/Estimated)
Best ForB2B companies waiting on net-30 to net-90 invoicesEstablished businesses with strong credit and collateralBusinesses with steady deposits and no invoices to factor

For two more side-by-side comparisons, read invoice factoring vs. invoice financing and invoice factoring vs. a business line of credit.

When factoring is not the right fit

  • ✗It costs more than a bank line over a full year. A 2% fee on invoices that pay in 30 days works out to roughly 24% a year if you factor every month. If you qualify for a bank line, it usually costs less.
  • ✗Your customers see the arrangement. They receive a Notice of Assignment and pay the lending partner directly.
  • ✗You carry the risk under recourse. If a customer does not pay, you repay the advance on that invoice.
  • ✗A UCC-1 goes on your receivables. Article 9 of the UCC covers sales of accounts, so the filing can block other financing secured by the same receivables until the relationship ends.

How IFXI handles your request for invoice factoring

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No long-term contracts

The lending partner’s factoring agreement has no long-term contract, so you are not locked into a multi-year commitment.

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Transparent fees

You see the 1%–3% factoring fee before you submit an invoice. Your rate follows your monthly volume, payment terms and customer credit.

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An IFXI specialist on your request

An IFXI specialist reviews your quote request, gathers what is needed for approval, and forwards your file the same day.

Funding scenarios for invoice factoring

Illustrative example · September 2026 · Dallas, TX

Staffing agency closes a payroll gap

Funding Amount
$85,000
Industry
Industrial staffing
Customer Type
Tier-1 automotive manufacturer
Funding Type
Invoice factoring
Invoice Terms
Net-45
Advance Rate
90%
The Problem

Weekly payroll for 140 temp workers came due before a net-45 manufacturer invoice cycle closed, and the agency’s bank declined a short-term line increase over limited operating history.

The Solution

The account was approved the same day and closed in 3 days, then 90% advanced on three invoices once the account went active.

Result

$76,500 advanced. Payroll cleared on time and the agency accepted two additional job orders that week.

Illustrative example · August 2026 · Atlanta, GA

Freight carrier drops quick-pay deductions

Funding Amount
$140,000
Industry
Freight logistics
Customer Type
National freight brokers
Funding Type
Freight invoice factoring
Invoice Terms
Net-30
Advance Rate
90%
The Problem

The carrier was accepting 3%–5% quick-pay deductions from brokers to cover fuel and driver pay, losing up to $7,000 a month.

The Solution

Once the account was active, 90% of each freight invoice advanced the same business day the carrier uploaded load paperwork.

Result

Quick-pay deductions stopped. A 1%–3% factoring fee replaced a 3%–5% deduction on every load.

Illustrative example · June 2026 · Chicago, IL

Electrical sub keeps two jobs moving on net-60

Funding Amount
$210,000
Industry
Electrical subcontracting
Customer Type
Commercial general contractor
Funding Type
Subcontractor invoice factoring
Invoice Terms
Net-60
Advance Rate
85%
The Problem

A general contractor on two active commercial projects ran net-60 pay cycles while the sub’s labor and material purchases came due together.

The Solution

Approved progress invoices backed by conditional lien waiver documentation were funded at 85%.

Result

$178,500 advanced. Both jobs stayed on schedule and the sub stayed current with suppliers.

Where IFXI arranges invoice factoring

We connect B2B businesses with invoice factoring in:
Texas, Florida, New York, Illinois, Georgia, Ohio, and Pennsylvania.
In Texas, see invoice factoring in Houston, Dallas and Austin.

Frequently asked questions about invoice factoring

What is invoice factoring and how does it work?

Invoice factoring is defined as a B2B financing arrangement where a business sells its outstanding invoices to a factoring company. You receive 70%–90% of the invoice face value up front, your customer pays the factor, and you receive the remaining reserve minus a 1%–3% factoring fee once the customer pays.

Under a notification factoring arrangement, your customers remit payment directly to the factor. Your advance rate and fee depend on customer creditworthiness, monthly volume, and industry risk. Recourse and non-recourse programs are both available. Non-recourse covers nonpayment for a reason the agreement covers, such as your customer’s insolvency, and prices toward the higher end of the range.

The short answer is no: invoice factoring and a business loan are different products. Invoice factoring sells receivables you already earned, so no debt appears on your balance sheet and you pledge no hard-asset collateral. Your cost is a factoring fee of 1%–3% per period, and no interest rate or APR applies.

Approval rests on customer creditworthiness, so your credit score and operating history do not decide it. Businesses with poor credit and limited history can qualify. Read the factoring vs. business loan comparison.

The short answer is 1% to 3% of the invoice face value per 30-day period. Your exact rate inside that range is set by monthly invoice volume, customer payment terms (net-30, net-60), customer creditworthiness, and industry risk profile.

Non-recourse programs price toward the higher end of the range. You see your fee before every advance.

The short answer is that factoring a $50,000 invoice costs about $1,000 at a 2% fee. At an 80% advance rate you receive $40,000 up front, then $9,000 of the $10,000 reserve after your customer pays. Your fee sits between 1% and 3%, so it runs $500 to $1,500 on a $50,000 invoice.

The short answer is same-day approval on a complete application, then a 2–5 day closing and 24-hour funding on your first invoice once the account activates. Invoices you submit fund by ACH or wire the same business day after that.

During closing, the lending partner files a UCC-1 financing statement against your accounts receivable and releases it when the factoring relationship ends.

The short answer is yes: each customer receives a Notice of Assignment telling it to send payment on factored invoices to the lending partner. Under UCC §9-406, once your customer has that notice, it settles the invoice only by paying as the notice directs.

The short answer is that B2C invoices, disputed receivables, and invoices past due more than 90 days are the most common disqualifiers. Invoices pledged under an existing UCC-1 filing with another lender and receivables from related parties also do not qualify.

Invoice factoring is strictly B2B, so consumer receivables are ineligible. The lending partner reviews the credit of every customer before any advance. A tax lien does not rule you out on its own; the lending partner reviews it case by case.

Sources

General information about invoice factoring. Rates, advance amounts and approval come from IFXI’s lending partner after its review and can change.

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