Invoice Factoring
Invoice factoring converts unpaid B2B invoices into immediate cash. A factoring company advances most of the invoice value up front, collects from your customer, and remits the balance minus a fee. Approval leans on your customers' credit more than yours, which makes it accessible for growing companies with strong clients.
Best uses
- Covering payroll while waiting on net-30 to net-90 invoices
- Funding growth without new debt
- Smoothing cash flow in staffing, trucking, and manufacturing
- Taking on larger contracts confidently
Typical borrower profile
- B2B companies invoicing creditworthy customers
- Staffing agencies, freight carriers, wholesalers, manufacturers
- Fast-growing companies whose receivables outpace cash
Potential qualification factors
Every lender sets its own criteria, and no factor guarantees or blocks approval on its own. Commonly reviewed items include:
- Quality and creditworthiness of your customers
- Invoice volume and aging
- Clean receivables without liens or disputes
Documentation to have ready
- Accounts receivable aging report
- Sample invoices and contracts
- Business bank statements
- Entity documents and ID
Benefits
- Approval driven by customer credit, not just yours
- Funding grows with your sales
- Not a loan, so no fixed debt payment
- Some factors handle collections professionally
Common challenges to plan for
- Fees reduce your margin on each invoice
- Customers may know a factor is involved, depending on structure
- Contracts can include volume commitments; read terms carefully
Frequently asked questions
Is factoring the same as invoice financing?
Close cousins. Factoring sells the invoice to the factor, which usually collects payment. Invoice financing borrows against invoices while you keep collections.
What is recourse vs. non-recourse factoring?
With recourse, you buy back invoices your customer fails to pay. Non-recourse shifts defined credit risk to the factor at a higher fee. Most agreements are recourse.
Will my customers know?
In notification factoring, yes, payments are directed to the factor. Some programs offer quieter structures. Discuss what fits your customer relationships.
How much of an invoice can be advanced?
Advance rates vary by industry and customer quality. The remainder, minus fees, is remitted when the customer pays.
How funding works with Bluejacket
Submit Your Request
Two minutes online with basic details about your goal.
Speak With a Funding Advisor
We review your situation and gather what lenders need.
Review Your Options
Compare structures side by side and pick what fits.
Receive Funding
Complete the lender's process and put capital to work.
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Submit a short request and a funding advisor will follow up with options matched to your situation.