Invoice factoring is a type of accounts receivable financing where a company sells their unpaid invoices in return for an immediate cash advance. Here is our simple 5 step process:
- Submit invoices for review
- CapFront verifies the invoices
- You receive 80-90% of your invoice amount
- CapFront collects the outstanding invoices
- You receive the remaining invoice balance minus a small fee.
Typically, your company will be advanced between 80-90% of the total invoice upfront. The remaining percentage is paid minus a small fee once the total invoice is paid in full. The fee depends on the size of the invoice, number of invoices you are factoring, and the credit strength of your customer’s accounts receivable.
Invoice factoring is an ideal solution for businesses who have longer payment terms or often have cash tied up in outstanding invoices from clients. It is common in many industries such as construction, manufacturing, trucking, healthcare, and wholesale.
Unlike traditional financing, your eligibility is not based on your credit score, collateral, or time in business. The application process is simple and straightforward and qualification is based on the creditworthiness of your customer, not your business.