Invoice Factoring: Turn Unpaid Invoices Into Working Capital

What Is Invoice Factoring?

Invoice factoring is a way to turn unpaid B2B invoices into immediate cash. Instead of waiting weeks or months for customers to pay, you sell those invoices to a factoring company. The factor advances most of the invoice value upfront—commonly 80–95%—then collects payment from your customer and releases the rest, minus a small fee. It is not a loan: you are selling an asset you already own (your receivables), so there is no new debt on your balance sheet and approval depends largely on your customers' credit rather than your own.

That makes factoring a strong fit for businesses that invoice creditworthy customers but feel the cash-flow squeeze of long payment terms—trucking carriers, staffing agencies, manufacturers, wholesalers, and service contractors. Learn the mechanics in our guide to what invoice factoring is and how it works, then apply to see your options.

How Invoice Factoring Works

Recourse vs Non-Recourse Factoring

Factoring agreements come in two forms, and the difference affects both your cost and your risk:

• Recourse factoring — the most common type. Your business is responsible for buying back an invoice if the customer ultimately doesn't pay. Because the factor takes on less risk, recourse factoring usually carries lower fees.
• Non-recourse factoring — the factor absorbs the loss if a covered customer fails to pay for credit reasons (such as insolvency). It carries a higher fee in exchange for that protection, and coverage terms vary by factor.

Which is right depends on your customers' credit quality and how much risk you want to offload. We help you compare both. Get matched with factors that fit your customer base.

Invoice Factoring Rates & Fees

Factoring is priced differently from a loan. Instead of an interest rate, you pay a factoring fee—commonly around 1–5% of the invoice value—plus the structure of the advance and reserve. Your actual rate depends on monthly volume, average invoice size, your customers' credit, and how long invoices take to pay. Higher volume and faster-paying, creditworthy customers generally earn better pricing.

For a full breakdown of how pricing works and what drives your rate, see invoice factoring rates and fees. To estimate other financing payments, use our financing calculator.

Industries That Use Invoice Factoring

Factoring works best for businesses that invoice other businesses (or government) on terms. Common users include:

Invoice Factoring vs Other Financing

Factoring is one of several ways to solve a cash-flow gap. The right tool depends on whether you have receivables, real estate, or simply revenue to borrow against.

Not sure which fits? See invoice factoring vs invoice financing or factoring vs a working capital loan.

Invoice Factoring Requirements

Factoring is often easier to qualify for than a traditional loan because it leans on your customers' credit. Most factors look for:

• B2B or government invoices — you invoice other businesses or agencies, not consumers.
• Creditworthy customers — the businesses that owe you have a solid payment history.
• Unencumbered receivables — the invoices aren't already pledged to another lender (no conflicting UCC lien).
• Clean invoicing — completed work or delivered goods, with clear, verifiable invoices.

Newer businesses and those with limited or challenged owner credit can often still qualify. Apply now and we'll match you with factors whose criteria fit your customer base.

Why Businesses Choose Axiant Partners

• One application, multiple factors — we match you with factoring companies that specialize in your industry and customer base.
• Speed when you need it — factoring can fund in as little as 24 hours after setup, so payroll and materials don't wait.
• 50-state reach — we serve B2B businesses nationwide across trucking, staffing, manufacturing, and services.
• No cost for match guidance — we're compensated by our lending partners. Your match service is free.

Invoice Factoring FAQs

What is invoice factoring?

Invoice factoring is a form of financing where you sell unpaid B2B invoices to a factoring company at a discount for immediate cash. The factor advances most of the invoice value upfront (commonly 80–95%), collects from your customer, then remits the rest minus a fee. Read the full guide.

How much does invoice factoring cost?

Factoring fees commonly range from about 1% to 5% of invoice value, depending on volume, customer credit, invoice size, and payment speed. See invoice factoring rates and fees.

How fast can you get funded?

After initial setup (often a few business days), individual invoices can fund in as little as 24 hours once verified. Because approval leans on your customers' credit, factoring is often faster than a loan.

What's the difference between recourse and non-recourse factoring?

With recourse factoring you're responsible if the customer never pays (lower cost). With non-recourse, the factor absorbs covered non-payment for credit reasons (higher fee). Most factoring is recourse.

Do you need good credit to qualify?

Factoring is based primarily on your customers' creditworthiness, not yours—so newer businesses and those with challenged credit can often qualify if they invoice creditworthy B2B or government customers.