Stop waiting 60 days to get paid.
You did the work. You sent the invoice. Now you get to wait thirty, forty-five, sixty days while your customer's accounts-payable department treats your rent money like an interest-free loan. Congratulations — you're a bank now, and you never applied for the job.
Invoice factoring is the exit. You sell the invoice to a factor. They advance you most of it — typically 80–90% — within a day or two. Your customer pays the factor on the normal schedule, and the factor releases the remaining reserve to you, minus their fee. The fee usually runs 1.5–3.5% per thirty days the invoice sits open. You trade a slice of the invoice for speed.
An invoice isn't revenue until it's a deposit. Factoring closes the gap.
Factoring vs. a revenue purchase
They rhyme, but they're different instruments. Factoring attaches to specific invoices — you're selling particular receivables, and the deal rises or falls on whether your customer pays. A revenue purchase attaches to your whole revenue stream — we advance cash against future sales overall and collect a fixed slice weekly, regardless of which customer paid when.
When does each make sense? If your problem is one or two slow-paying customers on otherwise healthy books, factor those invoices and keep the rest of your revenue untouched. If your problem is broader — you need capital for a hire, a machine, a lease — and your deposits are steady but young, a revenue purchase is usually the cleaner fit. Factoring requires invoices worth factoring; a revenue purchase only requires that money keeps coming in.
What makes an invoice factorable
Factors aren't buying your invoice — they're buying your customer's promise. What they look for:
- Creditworthy debtors. An invoice to an established company with real payment history factors easily. An invoice to a brand-new LLC with a free email address doesn't.
- No disputes. The work is done, accepted, and uncontested. Progress billing, retainage, and "we'll see about that change order" kill deals.
- Clean documentation. Signed PO or contract, proof of delivery or completion, and terms in writing.
Run your own numbers above. If the effective cost stings, good — it should make you picky about which invoices you factor and which customers you keep extending net-60 to in the first place.