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Invoice Factoring

Invoice factoring companies provide businesses with immediate access to the working capital needed to make payroll, purchase more inventory, or continue expanding operations without giving up equity. It involves a business selling its accounts receivable to a third-party factoring company for immediate funds, without waiting for their customers to pay.

After you submit your invoices, the factoring company validates them and provides funding within 24 hours. Once your customer pays the invoice, you receive the remaining balance minus a small factoring fee.

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Why You Should Use Us For Invoice Factoring

Invoice factoring is a flexible financing solution that allows businesses to access immediate funds by selling their unpaid invoices. This service is especially valuable for business owners and businesses facing cash flow gaps due to delayed customer payments. Invoice factoring is particularly suited for business-to-business companies that need quick access to capital but may have difficulty obtaining traditional loans. By using invoice factoring, businesses can improve cash flow, stabilize operations, and support growth by receiving working capital without waiting for customers to pay their invoices.

porter capital benefits

Fast Access to Cash

We advance funds on your receivables and get you approved for funding and factoring services in hours.

porter capital benefits

Competitive Rates

We pay up to 95% on each invoice, we’re one of the most competitive in the industry.

porter capital benefits

Flexible Financing

We tailor factoring solutions to your unique situation. Whether you’re coming out of bankruptcy, growing fast or gearing up for growth, we’re here to support you and your invoice financing needs.

porter capital benefits

Cash Flow

Factoring gives you consistent cash flow, so you can get paid from your outstanding invoices and run your business.

We specialize in working with B2B businesses across a range of sectors

Don’t see your business below, reach out to us – there’s a great chance we work with yours. And if we don’t we will refer you to trusted partner who can!

Flexible Funding for Staffing Companies

Staffing and Payroll

Flexible Funding for Staffing Companies

Factoring for Manufacturing Companies

Manufacturing

Factoring for Manufacturing Companies

Distribution

Distribution

Factoring for Distributors and Wholesalers

Service Companies

Service Companies

Factoring for Service Companies

Oil and Gas

Oil and Gas

Factoring for Oilfield and Gas Companies

Technology

Technology

Factoring for Technology Companies

How Invoice Factoring Works – Step by Step

Curious about how fees and advances are calculated? Use our factoring calculator to estimate your numbers.

The factoring process is straightforward. Here’s how it works:

1

Submit your invoices to Porter Capital.

2

Receive an advance – we pay 80 %–90 % of the invoice value (often within 24 hours).

3

We handle collections, communicating with your customer transparently or behind the scenes.

4

Once your customer pays, you receive the remaining balance minus our small factoring fee.

Try our Factoring Calculator

Use our factoring calculator to see your cash availability.

  • Unlimited funding, for as much as you have in eligible invoices
  • Choose which invoices you want to fund

Factored Invoice Amount ($)
Factoring Rate (%)
Advance Rate (%)

Types of Factoring We Offer

We proudly offer both recourse and non-recourse factoring to our clients. Invoice factoring is a popular solution for small businesses seeking immediate working capital, as it provides quick cash flow by selling unpaid invoices to a factoring company. While both provide immediate cash flow and upfront financing benefits, they differ in their mechanics and backend operations.

At Porter Capital we evaluate your unique business dynamics to recommend the best financing option for you. Our goal is to find the right financing solution for your business.

Recourse Factoring

In recourse factoring if a customer delays payment on invoices the business owner has to reimburse the factoring company. This arrangement presents less risk for us and typically results in lower fees and higher approval rates than non-recourse.

Non-Recourse Factoring

With non-recourse factoring the business owner is not liable if a customer defaults on payments. Since we assume most of the risk, fees might be slightly higher or we might be more selective in offering such agreements.

Understanding Costs and Fees

The primary expense is the factoring fee, sometimes called a discount rate, which is typically a small percentage of the total invoice value. This fee compensates the factoring company for advancing funds and managing the collection of outstanding invoices. Factoring fees can range from 1% to 5% of the invoice amount per month, depending on factors like the payment terms, the volume of invoices factored, and the risk profile of your accounts receivable.

The overall invoice factoring cost is also influenced by the type of factoring agreement you select. For example, non-recourse factoring, where the factoring company assumes the risk if a customer fails to pay, often comes with higher fees than recourse factoring, where the business owner retains some responsibility for unpaid invoices.

A reputable factoring company will clearly explain all costs upfront, helping you make an informed decision that supports your business cash flow without unexpected expenses. Always ask questions about any fees you don’t understand and make sure the factoring agreement aligns with your business needs.

Invoice Analysis

Know All the Costs Upfront
Fees Typically Range 1–5%
Avoid Hidden Charges

Meet Your Team

We appoint a dedicated Account Executive to your account once your account is funded. This Account Executive cares about you and your business and will deliver exceptional customer service. Instead of automated calls and answering machines that other factoring companies provide – we appoint a real person who deeply cares about your business and partners with you to deliver exceptional factoring services.

Get Cash for Your Outstanding Invoices Today

Stop waiting 30 to 90 days to get paid. With Porter Capital you can get the working capital you need, when you need it, to keep your business moving.

Frequently Asked Questions About Invoice Factoring

Invoice factoring is the process of selling unpaid invoices to a party factoring company for immediate cash. This factoring work allows a business to convert accounts receivable into working capital quickly. In essence, factoring is not a traditional loan, but rather a transaction where a business sells its invoices to a third-party financier, known as an invoice factoring service, who then manages collections and advances a percentage of the invoice value, often charging a fee.

Doing this helps the business avoid waiting for the customer to pay their invoice, subsequently saving them time and money. By using invoice factoring, the business can focus on its core competencies and not have to worry about waiting 30-plus days to get paid on each outstanding invoice. Factoring often involves batching invoices for greater funding. Factoring for a single invoice is referred to as “spot factoring.” Businesses factor invoices to access working capital and maintain smooth operations, especially during periods of high demand or when facing cash flow issues.

Learn more in our invoice factoring guide!

Cash flow is the lifeblood of your business. If you struggle or don’t have cash flow, you will potentially have to make very difficult cuts to your expenses to make payroll. Invoice factoring helps address cash flow issues caused by slow paying customers and delayed invoice payments, providing a quick solution to cover immediate expenses and maintain business operations.

These cuts could include belt-tightening, which could lead to problems with employee retention. It may also force you to make difficult cuts in your marketing and branding. If you are new to invoice factoring, this can have a ripple effect that can be costly in the future.

The best way to ensure better cash flow is to obtain access to it more quickly. With that in mind, the benefits of invoice factoring include the following:

  • Payment is made within a short period of time
  • Invoice factoring is a flexible system that allows companies to add and buy back invoices as needed
  • Invoice factoring can help your company pay bills on time, which increases corporate credibility with your suppliers and vendors;
  • Invoice factoring helps businesses focus on delivering value to their customers and not be distracted by cash flow difficulties
  • Invoice factoring service provides a streamlined way to convert invoices into cash, helping businesses overcome cash flow issues from slow paying customers

Invoice Factoring Example:
A small business has $50,000 in outstanding invoices from slow paying customers. To improve cash flow, the business sells these invoices to a party factoring company. The factoring company advances 85% ($42,500) immediately. Once the customers pay the invoices, the factoring company sends the remaining balance minus a 3% fee ($1,500). This invoice factoring example shows how a business sells its receivables to quickly access funds and manage cash flow gaps.

Factoring is usually cost-effective compared to other forms of financing, which may take a significant amount of time to put through company processes and procedures. However, this isn’t always the case, so it’s always best to look into your options and compare invoice factoring to other financing options before you commit to anything.

Factoring invoices doesn’t involve as much administration as it previously used to, and this is why it’s slowly becoming a widespread practice. With invoice factoring, you can work on items that are not associated with the process. You can focus on managing your business growth instead of worrying about the paperwork.

Factoring invoices doesn’t involve your bank or the bank of your business. Unlike a bank loan or traditional bank loans, which require extensive credit checks and lengthy approval processes, invoice factoring provides faster access to funds by selling invoices to a party factoring company. A bank loan involves borrowing money that must be repaid, while invoice factoring involves selling invoices to access cash without taking on new debt. The fact that it involves your company’s account is only there to prove that you’re a good credit risk, based on the fact that your company pays their outstanding invoices promptly.

Learn more about the difference between invoice factoring and bank loans.

Factoring invoices doesn’t involve as much administration as it previously used to, and this is why it’s slowly becoming a widespread practice. With invoice factoring, you can work on items that are not associated with the process. You can focus on managing your business growth instead of worrying about the paperwork.

Factoring invoices doesn’t involve your bank or the bank of your business. A factoring invoice is a loan you take to pay your outstanding invoices. The fact that it involves your company’s account is only there to prove that you’re a good credit risk, based on the fact that your company pays their outstanding invoices promptly.

Learn more about the difference between invoice factoring and bank loans.

Factoring invoices doesn’t involve an extra fee.

Factoring invoices can get a transaction from point A to point B in a matter of days rather than weeks or months. This is because of the accessibility and the speed of the process.

You can borrow as much as you like through invoice factoring. However, the amount you can borrow is also determined by your business’s ability to repay the loan. This means that such factors will limit you!

Learn more about the common terms found in factoring agreements and contracts.

For many expanding businesses, time is perhaps the essential consideration when deciding whether or not to engage with factoring firms. In contrast to bank loans and government subsidies, which may take months to complete, factoring businesses can handle applications in as little as a few weeks. Small companies needing quick funding to deal with cash flow problems will find it attractive because of its low cost.

However, depending on how the loan is structured, the costs may be much greater than those associated with a conventional loan. Sometimes, a bank may be the best choice for your small company if you can afford to wait longer and are reasonably confident that your loan will be granted. Even when they are qualified for bank loans, some businesses determine that the time it takes to qualify for and receive a loan would be detrimental to their bottom line in the long run.

Eligibility for invoice factoring often depends on the creditworthiness of your customers rather than solely your business credit. While business credit can impact access to financing options, invoice factoring companies primarily assess the likelihood of your customers paying their invoices on time.

Key Takeaways Invoice Factoring:

  • Invoice factoring provides immediate cash flow by allowing businesses to sell unpaid invoices to a party factoring company.
  • It is especially useful for managing cash flow issues caused by slow paying customers and delayed invoice payments.
  • The process is faster and often more flexible than traditional bank loans or a bank loan.
  • Eligibility is based more on your customers’ creditworthiness than your business credit.
  • Costs and fees vary, so compare options before committing.
  • Invoice factoring service offers a streamlined, accessible way to factor invoices and maintain business operations.

Customers are focused on getting high-quality products and services from your company. Most customers want to pay their invoices on time and have little concern about the address where payments are sent, as this is often an accounting department transaction. Factoring companies will notify your customers of the correct address and treat your customers as you would, with respect and kindness.

Small and medium-sized businesses often struggle financially, especially when learning to manage rapid growth.

They have to wait until their clients and customers pay pending invoices. Factoring receivables, in this regard, makes a convenient way to finance businesses that are going through a rough patch and have a limited cash flow. A factoring company as an intermediary buys invoices and pays businesses in advance to manage the working capital.

Factoring helps businesses, particularly startups, get off the ground and aggressively grow them by providing the necessary funds. Invoice discounting makes it appealing for funding companies to provide capital, and with this immediate working capital, companies can gain traction, boost revenues, grow, compete against giant brands, and better manage their finances. If your small or medium-sized company is looking for easy alternative funding, invoice factoring can definitely help it pursue aggressive growth.

Invoice factoring is essential in helping you maintain healthy relationships with your customers. However, you can’t do it alone; working with a professional factoring company is important to reap the benefits of investing in invoice factoring. For the best quality of service, we recommend reaching out to an invoice factoring company that understands the value of your customers and delivers excellent service founded on expertise and knowledge.

When looking for a factoring company to help you form and grow your customer relationships, make sure to work with an organization that places great importance on communication. Since you’ll be using invoice factoring in every stage of development, they must make sure to relay everything you should know about each step for a problem-free process.

Revenue from factored invoices qualifies as taxable in certain situations. Your business will owe taxes if it sells its invoices to the factoring company or if the factoring company is a parent company that owns your business.

Factoring can be ideal for startups because approval focuses on your customers’ credit rather than your limited operating history. Our Complete Guide includes a section on startups and factoring.

Invoice Factoring Articles & Resources

What to expect after you fill out our 60 second application

  • A member of our sales team will call you within 15 minutes if you submitted this during business hours
  • We will ensure you are a good fit for our factoring services.
  • If you are, we will issue a formal proposal that outlines advance rate, fee structure, and service details.

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