Invoice Factoring

Turn outstanding B2B, B2G, and even B2C invoices into cash fast. 


Overview of Invoice Factoring

It’s typical for small businesses to bill clients via invoice but only get paid 30, 60, or even 90 days later. With invoice factoring (aka accounts receivable factoring and invoice financing), you can plug the hole in your cash flow by receiving capital now in exchange for the outstanding invoices. The invoice financing preferred by FitBiz Loans differs from traditional invoice factoring. Rates start as low as 0.5% - 0.7% per week. You repay over 12 or 24 weeks.  Your clients won't be contacted, and your clients can continue to make payments to you.

Turn Unpaid Invoices Into Cash Now

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How Invoice Factoring Works

Did you know that more than 80 % of small businesses fail due to poor cash flow management? If your business is suffering from negative cash flow due to unpaid invoices, invoice factoring can help it get back on track. While traditional invoice factoring has some problems, invoice financing offers a discrete invoice advance.

Traditional Invoice Factoring:

With traditional invoice factoring, an invoice factor buys your invoices from you at a discount and gives you an infusion of capital in exchange. Your client pays the invoice factor directly. A lot of small businesses dislike traditional invoice financing because it can disrupt their client relationships. For example, the invoice factor may contact your client to verify the invoice and to collect payment on a late invoice.

Invoice Financing:

Invoice financing advances money to you in a much more seamless and small business-friendly way than traditional factoring.

If you need up to $100K in short term working capital, you can get financing equal to 100% of the value of your invoices with Fundbox. The financing is structured like a line of credit which you pay back over 12 weeks or 24 weeks. For example, if you have a $5,000 invoice that you’re awaiting payment on, you'd receive a $5,000 loan and must pay back that amount (plus fees of 0.5% - 0.7%) over the next 12 or 24 weeks. Opening an account with Fundbox in free.

If you need more than $100K in capital, the money you need will come to you in two parts:

small business loansYou receive an upfront advance equal to 85-90 % of the invoice. For example, if you factor a $10,000 invoice, you will receive $8,500-9,000 right away.

small business loansYou receive the remainder (minus the lender’s fees) when your client pays the invoice. Your client pays the invoice factor directly instead of paying you.

With this financing structure, there are no installment payments because the invoice factoring company gets paid when your customer pays the invoice. Some businesses prefer this because it gives them a large infusion of working capital that they can put to use right away without having to pay it back bit by bit.

Even though your customer pays the invoice factor, you still retain control over your customer relationships. The invoice factor won’t contact your clients, and all you have to do is tell your clients that your payment details (e.g. address, account number) have changed. Checks can still be made out in your business’ name. For this financing option, visit BlueVine.

It’s best to use invoice financing to factor invoices that you are fairly certain will be paid on time. If your clients are late to pay an invoice, that can shift the responsibility for payment on to you. If you’ve already spent the funds on something else, that could put you in a bind. However, as long as you use it for timely customers, invoice financing can be a great way for businesses, including startups, to stabilize their cash flow.

Also, it's always best to use expense-specific invoice factoring if possible. For example, there are staffing factoring options that are geared to help businesses with their short-term payroll needs.

Will I Qualify for Invoice Factoring?

The qualification requirements for invoicing factoring are pretty straightforward:

small business loansYou must bill other business or government customers (e.g. so retail invoices to consumers aren't eligible).

small business loansThe invoices should be due in 90 days or less.

small business loansThere shouldn’t be other business liens on the invoices.

small business loansYour clients should be creditworthy and have a history of paying invoices on time.

There may be other requirements, such as a minimum credit score (check your score for free here) or time in business, but these usually aren’t too onerous. However, sometimes specific invoice factoring like freight factoring might have different qualifications.

Cost of Invoice Factoring

We offer a unique type of invoice factoring, where you will be a charged a one-time fee only (no ongoing fees). Rates start as low as 2.5 % for a 30 day invoice.

We can also arrange invoice factoring in which you're charged on a weekly basis, with fees starting as low as 0.5 % per week. Cost tends to decrease as a business factors more invoices and builds up a good borrowing history.

Here's an example: if you factor a $7,000 invoice at a rate of 0.5 % per week and your client takes 30 days to pay the invoice, your fee will be $140. If your client, on the other hand, took 60 days to pay the invoice, your fee will be double that amount.

When you convert the cost of invoice financing to an Annual Percentage Rate (APR), it equates to about 25-60 % APR. 

The Details:

Maximum Loan Amount

Loan Term
1-3 months

Interest Rates
25-60 % APR

As fast as 1 business day

Down Payment
Not required.

Not required.

Personal Guarantee?
May be required as security if your client doesn’t pay the invoice.

Have a question?

max-loan-amount(800) 216-9440

[email protected]


small business loansHelps stabilize your business’ cash flow.

small business loans

Available for startups and business owners with low personal credit scores.

small business loans

Quick way to obtain funding.

small business loans

You can apply electronically with virtually no paperwork.

small business loans

You can get up to 100 % financing up front.


Only available for B2B or Business2Government businesses.

Can be expensive to start (repeat customers and larger invoices get better rates).

Customer may have to pay invoice factor directly but usually remains unaware that you are using invoice financing.


How to Apply

Answer Simple Questions

Browse Your Loan Options


Get Funded in Record Time


Additional Resources

Want more details on invoice factoring? Read this in-depth guide.

Do business better with invoicing software. Learn about the best invoicing software here.

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