Invoice financing is a business-to-business transaction that provides a company the ability to leverage unpaid 30, 60 and 90 day invoices to obtain specialized short-term business financing before your customer actually pays the invoice. With invoice financing (often called other terms like “factoring”, “invoice factoring”, “accounts receivable factoring”) a lender will provide specialized asset-based financing by using your business’s unpaid invoices as collateral to advance your company between 70-95 of the invoice’s total dollar value.
When the factoring lender provides your company or small business the initial advance they will charge you a fee (usually between 1-3 of the total invoice, along with an additional fee added each week) and hold the rest until the invoice is paid. Once the invoice is paid-in-full, the remainder of the invoice amount is released to your small business. Rather than relying on your company’s creditworthiness to secure financing, invoice financing companies actually look more at the creditworthiness of your customer, as it is their future payment they are buying at a discount.
There are many advantages in deciding to factor your invoices as compared to other forms of business and commercial financing. Factoring your company’s invoices allows you quick access to needed cash without having to present the factoring company all of your business and personal financial statements.
The funding process when selling invoices is about as fast as a merchant cash advance and other short term business loans — which usually take between 1-4 days to fund, without having as high of a rate as those financing options. While credit is a factor in making a final decision whether or not the factoring company will purchase your company’s invoices, its not the only factor in the decision. In fact, what matters more to the purchaser of the invoice is the creditworthiness of the debtor of the invoice.
Minimum Requirements:
Owner/Borrower Minimum FICO 640+
Annual Accounts Receivables of at least $10,000,000
When the factoring lender provides your company or small business the initial advance they will charge you a fee (usually between 1-3 of the total invoice, along with an additional fee added each week) and hold the rest until the invoice is paid. Once the invoice is paid-in-full, the remainder of the invoice amount is released to your small business. Rather than relying on your company’s creditworthiness to secure financing, invoice financing companies actually look more at the creditworthiness of your customer, as it is their future payment they are buying at a discount.
There are many advantages in deciding to factor your invoices as compared to other forms of business and commercial financing. Factoring your company’s invoices allows you quick access to needed cash without having to present the factoring company all of your business and personal financial statements.
The funding process when selling invoices is about as fast as a merchant cash advance and other short term business loans — which usually take between 1-4 days to fund, without having as high of a rate as those financing options. While credit is a factor in making a final decision whether or not the factoring company will purchase your company’s invoices, its not the only factor in the decision. In fact, what matters more to the purchaser of the invoice is the creditworthiness of the debtor of the invoice.
Minimum Requirements:
Owner/Borrower Minimum FICO 640+
Annual Accounts Receivables of at least $10,000,000
This is not an offer to lend or extend credit. Credit approval is subject to credit standards, and actual terms (including actual loan amount) may vary by applicant. We Finance America Inc. requires certain supporting documentation with each new application and offers no guarantee of funding or loan offers and the terms thereof. All Loan decisions are made by our lending partners and subject to their specific underwriting criteria and approval processes.
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