Invoice Factoring

What it is

Invoice factoring turns your unpaid customer invoices into cash now. Instead of waiting 30, 60, or 90 days for a client to pay, you sell those invoices to a factoring company at a discount and receive most of the value right away.

The factoring company charges a fee for the service, usually a small percentage of the invoice value. Your customer then pays the factor directly when the invoice comes due. Once paid, the factor sends you the remaining balance, minus its fee.

Factoring is based on the strength of your customers' credit, not just your own. That makes it a useful option for B2B businesses that are growing quickly or dealing with slow-paying clients.

Best for

• B2B businesses with slow-paying clients
• Companies growing faster than their cash flow allows
• Owners who want cash now without taking on a traditional loan

Typical requirements

Most lenders typically look for the following. Exact criteria vary by partner.

• Business-to-business invoices with creditworthy customers
• Outstanding receivables you are waiting to collect
• Time in business: many factors are flexible here
• Documents: your invoices, customer details, and accounts receivable aging report

How the process works

What to expect

Once set up, factoring can fund within days of submitting invoices. The factor charges a fee, and your customer pays the factor directly. The exact discount and fee depend on your invoice volume and your customers' credit. Alta connects you with factoring partners; the partner sets the final terms.

Final terms, eligibility, rates, and approval decisions are made by the lender partner, not by Alta Business Loans. We do not guarantee approval or specific terms.