Invoice Factoring

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Turn Your Outstanding Invoices Into Cash with Ease

Invoice factoring is not just a strategy but a cornerstone for both seasoned enterprises and businesses navigating seasonal challenges. For firms that have built a legacy in their industry but still face the routine complexities of delayed payments, and for those oscillating with the ebbs and flows of seasonal demand, invoice factoring is the stabilizing force ensuring cash flow continuity.

Beyond just meeting immediate operational needs like payroll and infrastructure investments, this is about laying down the framework for sustainable growth. Whether you’re in the heart of an industry boom or in the preparatory phase for a seasonal uptick, invoice factoring empowers you to strategize with foresight, while also offering your valued clients a broader spectrum of repayment options.

Are you an established business or a seasonal operator? Enhance your financial strategy with us. Dive into the benefits of invoice factoring tailored to your unique industry needs. Reach out now.

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The Power of Invoice Factoring in Modern Enterprise

Invoice factoring emerges as a quintessential financial tool, ideal for businesses spanning a myriad of sectors. From stalwart companies with decades of industry presence to dynamic startups on the cusp of expansive growth, the utility of factoring is universally acknowledged. It’s not merely about managing receivables but about harnessing an engine of financial fluidity. This approach ensures that capital is always at hand, providing businesses the leverage to navigate both routine operational costs and unexpected financial exigencies. Such immediacy in accessing funds not only bolsters working capital but also serves as a catalyst for sustained growth, ensuring that every facet of the business, from innovation to payroll, proceeds without a hitch. In an ever-evolving commercial landscape, the astuteness of adopting invoice factoring becomes paramount for enterprises aspiring for excellence and longevity.

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How Does Invoice Factoring Work?

Invoice factoring is a competitive option for businesses that need financial dexterity while awaiting compensation. Your business can gain immediate access to working capital by offloading client invoices to an organization willing to pay for them. The process involves three parties — you, your client and Porter Capital — interacting over a few steps: 

  1. Provide your product or service: Your business will fulfill its obligations to the client at the price both parties agree to.
  2. Send an invoice: Your accounts payable department will send a bill to the client.
  3. Apply for invoice factoring service: A representative from your business can submit an invoice factoring request along with relevant invoices, bank account numbers and tax information.
  4. Exchange the invoice with Porter Capital: Upon approval, we will collect your invoice and advance you the amount your client owes minus a small fee and a portion that we will hold until your client pays.
  5. Leverage working capital: Rather than waiting for payment, your company can use invoice factoring funds for any immediate or long-term expense.
  6. Receive the final portion of the invoice: We will return the withheld portion of the amount due when your client completes their payment.

We Empower Growth Through Invoice Factoring

Forward-thinking enterprises leverage invoice financing to catalyze immediate growth, eliminating the conventional wait of 30, 60, or even 90 days for invoice settlements. We advocate for invoice factoring as the optimal solution for businesses prioritizing swift capital inflow. By accelerating the receipt of customer payments, you sustain operations seamlessly, bypassing the constraints and prerequisites of conventional lending.

porter capital benefits

Quick Access to Cash

By advancing funds based on your receivables, we ensure rapid responses, facilitating swift approvals for both funding and factoring services.

porter capital benefits

Competitive Rates

With our invoice factoring services, we provide up to 95% value on each invoice, positioning us among the most competitively priced in the industry.

porter capital benefits

Flexible Financing

We tailor factoring solutions to fit your unique circumstances. Be it navigating past or present bankruptcy, managing swift expansion, or gearing up for growth, we’re here to support you.

porter capital benefits

Improve Cash Flow

Factoring ensures consistent cash flow, granting you prompt access to funds from outstanding invoices, thus streamlining your business operations.

Types of Business That Use Invoice Factoring

Every enterprise, irrespective of its industry, requires efficient working capital strategies to realize its objectives. Invoice factoring serves as a linchpin in streamlining your day-to-day operations. Instead of prolonged waits, secure an upfront payment for your invoices, ensuring uninterrupted business flow, even amid seasonal financial fluctuations. With immediate access to funds from your outstanding invoices, you’re empowered to allocate resources more strategically.

invoice factoring for staffing companies

Staffing and Payroll

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porter capital manufacturing

Manufacturing

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Distribution

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Service Companies

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porter capital oil and gas industry

Oil and Gas

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Technology

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Tailored Financing Solutions: Types of Factoring We Offer

We proudly offer both recourse and non-recourse factoring to our clients. These are two distinct invoice factoring agreements for accounts receivable. While each provides immediate cash flow and upfront financing benefits, they differ in their foundational mechanics and backend operations.

At Porter Capital, we meticulously evaluate your unique business dynamics—considering industry benchmarks, your enterprise’s scale, and projected returns on due invoices—to recommend the most apt financing route. Our commitment is to pinpoint the optimal financing solution tailored to your distinct requirements.

Recourse Factoring

In recourse factoring, should a customer delay payment on invoices, the business owner is obligated to reimburse the factoring company. This arrangement presents diminished risk for us, typically leading to more favorable fees and an elevated approval rate than its non-recourse counterpart.

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Non-Recourse Factoring

With non-recourse factoring, the business owner is not held accountable if a customer defaults on payments. Given this arrangement, we, as the factoring company, assume the majority of the risk, which might reflect in slightly higher fees or a more discerning approach in offering such agreements.

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Optimized Cash Flow: The Strategic Advantage of Invoice Factoring

Invoice factoring emerges as a pivotal tool for businesses eager to fortify their financial foundation while navigating the wait for customer payments. If delayed payments are a recurring challenge, or if your operations are influenced by seasonal trends, leveraging unpaid invoices provides a remedy, allowing for swift payments upfront.

Whether your capital requirements span from ensuring timely salaries, procuring state-of-the-art equipment, or fueling business expansion, invoice financing stands ready to assist. This approach not only bolsters your cash flow but also presents your clientele with adaptable repayment options.

Our commitment is efficiency. We pride ourselves on a streamlined approval process, often delivering decisions within a mere 24 hours. Our reduced documentation approach is designed to eradicate potential hassles, ensuring you have unhindered access to the resources vital for your business’s ascent. When juxtaposed with traditional financing avenues, invoice factoring unveils a spectrum of growth opportunities.

Why Porter Capital?

Porter Capital stands at the forefront, offering industry-leading invoice factoring rates coupled with an expedited approval pathway for business financing. Our expertise spans a diverse range of industries across North America, underscoring our commitment to delivering premier invoice factoring solutions. With the provision to advance up to 90% on individual invoices and ensuring the balance (after deducting our factoring fee) post customer payment, we prioritize accelerating your revenue realization.

  • Quick Access To Invoice Factoring

  • Competitive Rates

  • Flexible Financing Solutions

  • Improved Cash Flow

  • Incredible Customer Service

  • No Concentration Limits

  • Minimum Documentation Required

  • Will Fund Past-Due (Outstanding) Invoices

  • Trusted Business-To-Business (B2B) Factoring Company

Ready to Get Started?

Curious about the transformative potential of invoice factoring for your enterprise? Discover how Porter Capital can be your ally in obtaining pivotal business funding and financing services. Reach out via the contact form below or connect with us directly over a call.

At Porter Capital, our efficient approvals and attractive factoring rates position us as a top-tier financing solution provider. Unlock rapid cash flow, ensure consistent growth, and gain the financial agility to expand your operations with confidence.

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Utilize our invoice factoring calculator to determine the estimated cash advance, the final amount receivable upon invoice payment, and the associated factoring fee.

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

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Frequently Asked Questions About Invoice Factoring

Invoice factoring is the process of selling invoices to third-party financiers. It is a relatively simple concept of obtaining cash from a lender against the value of invoices. In essence, factoring is a short-term loan advanced to a business by a finance provider in exchange for an invoice.

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 outstanding invoices.

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.

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

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. 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. In fact, a factoring invoice is the same as another invoice. The only difference is that it’s for a company instead of an individual.

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.

1. Positive Credit Score

You may have incurred debt as a small company owner or have less-than-perfect credit. Many alternative lenders are well aware of this. On the other hand, most respectable companies demand a personal credit score of at least 530 to be considered for financing.

2. Aligned Invoice Terms

Generally, finance companies advance invoices with a face value of at least $500 or more for clients. For minor bills (under $500) due from the same customer, some providers let you batch such invoices to satisfy the bare minimum requirement of one per customer. Most factoring firms demanded that the due date on your unpaid invoice be 1 to 12 weeks away before considering your invoice for factoring.

Learn more about how to use invoice payment terms for your business properly.

3. Clients With Good Credit Scores

The customers of the companies that are most suited for factoring are often those that have long payback periods on their contracts. Whether your company has excellent or poor credit, you may use your customers’ creditworthiness to qualify for invoice factoring.

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. Precisely, 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. 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 a 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.

There are many situations where factored receivables are tax-exempt, along with the expense associated with factoring invoices. Your business will not pay taxes on income earned from factored receivables as long as you work with a third-party company based in the United States. Receivables are also tax-exempt when your business retains invoice ownership by exchanging the invoice for an advance rather than a payment. Additionally, setup fees, commissions and related factoring expenses are deductible.

Invoice factoring is similar to an investment in that your business pays a small amount for financial gain. We will collect a modest fee in exchange for your invoice. That small fee leads to greater growth as you reinvest your monetary advance into your business.

Invoice Factoring Articles & Resources

  • notice of assignment factoring

What is a Notice of Assignment?

When you enter a factoring contract, you agree to sell your invoices, or accounts receivable, to a factoring company or

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