Invoice Factoring
Turn your unpaid invoices into immediate cash
$25K – $10MFunding Range
15–30 daysSpeed
Turn your unpaid invoices into immediate cash
Invoice factoring converts your accounts receivable into working capital within 15–30 days. Instead of waiting 30, 60, or 90 days for customers to pay, you sell your outstanding invoices to a factoring company at a small discount and receive 80–95% of the invoice value upfront. The remaining balance (minus the factoring fee) is paid when your customer pays the invoice. It’s not a loan — it’s an advance on money you’ve already earned, which means qualification is based primarily on your customers’ creditworthiness, not yours.
Approval is based on the creditworthiness of your customers, not your business’s credit score. If your customers pay their bills, you can qualify.
Receive 80–95% of your invoice value within 15–30 days. No more waiting 30–90 days for customer payments.
Invoice factoring is an advance on money you’ve already earned, not new debt. It doesn’t add a liability to your balance sheet.
Bridge cash flow between invoice payment, Fund payroll while waiting on receivables, Take on larger contracts with confidence, Grow without taking on debt, and Stabilize seasonal revenue swings.
Don’t meet every requirement? Apply anyway — we evaluate the full picture.
Share your outstanding B2B invoices and customer information. We’ll assess the credit quality of your accounts receivable.
Receive 80–95% of the invoice value deposited into your account, typically within 15–30 days of approval.
When your customer pays the invoice, you receive the remaining balance minus a small factoring fee (typically 1–4% per invoice).
Factoring is priced as a discount rate charged per period the invoice stays outstanding, not as an APR. A typical structure: 80–95% of the invoice advanced immediately, with a fee of 1–3% per 30 days until your customer pays. When they pay, you receive the reserve balance minus fees.
| Invoice profile | Advance rate | Fee per 30 days |
|---|---|---|
| Strong commercial or government debtors | 90% – 95% | 1.0% – 1.5% |
| Standard B2B, mixed debtor quality | 85% – 90% | 1.5% – 2.5% |
| Construction, staffing, high-concentration | 75% – 85% | 2.0% – 3.5% |
The critical distinction is how the fee accrues. A flat 30-day rate charges the same 2% whether payment lands on day 31 or day 59 — expensive on slow payers. A pro-rated daily rate only charges for days actually outstanding. On 45-day terms that difference can double your effective cost, and it is the single most important term to check.
Also ask about the extras: lockbox fees, wire fees, minimum monthly volume commitments, and termination penalties. Factoring agreements frequently carry 12-month minimums with early-exit fees — a real constraint if your receivables profile changes.
Every offer we return specifies recourse or non-recourse, and the choice materially changes both your price and your risk. Recourse leaves you liable if your customer never pays — cheaper, because you keep the credit risk. Non-recourse puts that loss on the factor, typically for 0.5–1% more per period.
The caveat worth knowing before you compare offers: non-recourse almost always covers insolvency only. It does not cover a customer withholding payment over a dispute about your work, delivery, or quality — and in construction and staffing, disputes are the far more common failure mode. We read the qualifying-credit-event definition in each agreement and tell you what it actually covers, rather than what the label implies.
For the full mechanics of both structures, see our guide to how invoice factoring works.
Factoring is the right tool when one specific condition holds: your cash is trapped in work you have already completed and invoiced. If that is not your situation, something else is cheaper — and because we place every one of these structures, we have no reason to steer you here.
| Situation | Right structure |
|---|---|
| Customers owe you on completed, invoiced work | Invoice factoring |
| You need cash for work not yet performed | Working capital advance |
| You have a confirmed PO but cannot fund production | Purchase order financing |
| Recurring, unpredictable gaps | Line of credit |
Factoring's underappreciated advantage: approval depends on your customers' credit, not yours. A contractor with a 580 FICO and strong invoices to a creditworthy general contractor can factor when no lender would extend a loan. That makes it one of the few genuine options for businesses with damaged credit but real receivables.
Its underappreciated cost is not financial: your customers usually learn you are factoring, because payment is redirected to the factor's lockbox. In some industries that is unremarkable and expected; in others it invites questions. Notification-free arrangements exist but price higher and require stronger financials.
Bay Street places factoring alongside every other structure across 50+ funding partners, so the comparison is real rather than hypothetical. For the full mechanics, see our invoice factoring guide, our freight factoring guide for trucking, and our specialty guide to construction invoice factoring.
Factoring fees typically range from 1% to 4% per invoice, depending on invoice volume, customer creditworthiness, and payment terms. Higher volumes and shorter terms generally mean lower fees.
In most arrangements, your customers will be notified that payments should be directed to the factoring company. Some non-notification factoring programs are available for an additional fee.
B2B invoices for completed work or delivered goods typically qualify. Consumer invoices, progress billings, and invoices with disputes generally do not qualify.
Advance rates typically range from 80% to 95% of the invoice face value. The exact rate depends on your industry, customer creditworthiness, and invoice terms.
One application, no credit impact, and a dedicated specialist to walk you through your options. See what you qualify for in minutes.