Invoice Factoring Guide: Unlock Cash Flow Fast – Factor & Fund

Concerned about cash flow in 2025’s economic climate? Invoice factoring is your solution. At Factor & Fund, we help B2B businesses turn unpaid invoices into immediate capital. Explore how invoice factoring works, its costs, pros, cons, and alternatives—plus real-world examples to outpace competitors.

Key Takeaways

• Invoice factoring lets you sell unpaid invoices to a third party for cash upfront, ideal for B2B firms.
• Fees range from 1% to 5% monthly, varying by invoice size, client credit, and agreement type.
• Perfect for businesses needing quick funds or those ineligible for traditional loans.
• Factor & Fund offers tailored factoring with a free consultation—contact us at (888) 884-4823!

What Is Invoice Factoring?

Invoice factoring is a financing method where you sell your unpaid invoices to a third party (a factoring company) at a discount for instant cash. This empowers B2B companies to address cash flow challenges, cover expenses, or seize growth opportunities without waiting 30-90 days for client payments.

Unlike loans, invoice factoring isn’t debt—it’s a sale of your receivables. At Factor & Fund, we specialize in this, helping businesses like yours thrive. Did you know? Invoice factoring is also called accounts receivable factoring or debt factoring.

How Does Invoice Factoring Work?

Invoice factoring skips the loan process. You sell your outstanding invoices to a factoring company like Factor & Fund, which advances 80-90% of the value upfront. The company then collects payment from your client, remitting the balance minus fees.

Step-by-Step Process

1. Sell Your Invoice: Submit your $10,000 invoice to Factor & Fund.
2. Get an Advance: Receive 85% ($8,500) within 24 hours.
3. Collection Handled: We manage client repayment.
4. Receive Remainder: Get the rest ($1,500) minus a 2% fee ($200), totaling $9,800.

This streamlined approach beats traditional funding, delivering cash when you need it most.

How Much Does Invoice Factoring Cost?

Factoring fees typically range from 1% to 5% of the invoice value per month, depending on:

• Invoice amount and volume.
• Client creditworthiness.
• Recourse vs. non-recourse terms.

With recourse factoring, you repay if clients default. Non-recourse shifts this risk to us, often raising fees slightly. At Factor & Fund, we offer transparent pricing—contact us for a custom quote!

Example Breakdown

• Invoice Value: $20,000
• Advance (90%): $18,000
• Fee (2% for 30 days): $400
• Remaining Amount: $2,000 – $400 = $1,600
• Total Received: $19,600 (APR ~24%, lower than NerdWallet’s 42.35%)

Our optimized rates save you money compared to industry averages.

Pros and Cons of Invoice Factoring

Pros

• Instant Cash: Access funds in 24 hours to bridge cash flow gaps.
• Improved Liquidity: Extend client terms while staying solvent.
• Easy Approval: Focuses on client credit, not yours—ideal for startups.
• No Collateral: Sell invoices, not assets.

Cons

• Costly Over Time: High fees if clients pay late (mitigate with Factor & Fund’s credit checks).
• B2B Only: Not for consumer-facing businesses.
• Less Control: We handle collections—choose a partner you trust.

Factor & Fund minimizes cons with expert client management and competitive rates.

Invoice Factoring vs. Invoice Financing

Invoice financing uses invoices as collateral for a loan, with you collecting payments and repaying with interest. Invoice factoring transfers ownership to us, simplifying your workload. If you value control, financing might suit; for speed and ease, choose invoice factoring. See our full comparison for details.

Real-World Success with Factor & Fund

• Case Study: A trucking firm turned $50,000 in invoices into $45,000 cash in 48 hours, fueling a new contract. Read more in our portfolio.
• Tool Tip: Use QuickBooks to track invoices for seamless factoring integration.

Is Invoice Factoring Right for You?

Yes, if you face cash flow delays or can’t secure loans. Assess your client payment history—strong credit reduces costs. Factor & Fund offers a free analysis to confirm fit.

Frequently Asked Questions

• Is invoice factoring a good idea? Yes, for B2B firms needing fast capital—contact us to start!
• Do you need good credit? No, client credit matters more.
• Do banks offer it? Some do (e.g., AltLINE), but Factor & Fund provides faster, tailored service.

Get Started Today

Don’t let unpaid invoices stall your growth. Call Factor & Fund at (888) 884-4823 or visit contact us for a free quote. Outpace competitors with our expertise!