Invoice Financing: Turn Unpaid Invoices Into Working Capital in 24 Hours
Stop waiting 30, 60, or 90 days for customers to pay. REIL Capital advances up to 90% of your outstanding invoice value with an 85% approval rate, no personal credit check, and rates starting at just 0.5% per month.
Access up to 90% of your outstanding invoice value upfront. No need to wait weeks or months for customer payments. Get the cash your business needs to cover payroll, buy materials, and take on new contracts.
After approval, funds are deposited directly into your business account within one business day. Most clients receive their first advance within 1 to 3 days of submitting invoices.
Invoice financing approval is based on the creditworthiness of your customers, not your personal credit score. Even if your credit is fair or poor, you can qualify as long as your customers are creditworthy.
What Is Invoice Financing?
Invoice financing, sometimes referred to as invoice factoring or accounts receivable financing, is a tool that lets businesses turn pending invoices into fast cash. Rather than waiting 30, 60, or even 90 days for customer payments, you sell those invoices to a factoring company at a slight discount and can get a cash advance in just 24 hours.
Here's how it typically unfolds:
- First, you deliver your goods or services to the customer and provide them with an invoice that has payment terms of net-30, net-60, or net-90.
- Next, you submit this invoice to REIL Capital's factoring network.
- Soon after, you receive up to 90% of the invoice's value directly into your bank account, often within just one day.
- Once your customer settles the invoice, you get the remaining balance, though a small factoring fee is deducted (starting at 0.5% per month).
What's important to remember is that invoice financing isn't a loan. You're actually selling an asset you currently have (the invoice), so it doesn't add any new debt to your balance sheet and won't affect your personal credit score.
Benefits of REIL Capital Invoice Financing
Convert unpaid invoices into working capital within 24 hours. Bridge the gap between delivering work and receiving payment so your business never stalls waiting on slow-paying customers.
Invoice financing is not a loan. You are selling an asset you already own, which means no new debt recorded, no impact on your credit score, and no personal guarantee required.
As your invoicing volume grows, your available financing grows with it. Take on larger contracts and more clients knowing you can fund operations from day one without waiting for payment.
How to Get Invoice Financing With REIL Capital
Invoice Financing Requirements
Recourse vs. Nonrecourse Invoice Factoring
When you're weighing different invoice factoring options, one key thing to consider is whether the deal is recourse or nonrecourse. This choice can make a significant difference.
Recourse Factoring: In this setup, you agree to repurchase any invoice that your customer doesn't pay. Why does it usually come with lower fees? Because the factoring company isn't taking on as much risk. It's the most common type and is a great fit if your customers are dependable and have good credit.
Nonrecourse Factoring: Here, if your customer can't pay due to insolvency, the factoring company takes the hit. Naturally, this means higher fees, as the funder assumes the risk of default. This option makes sense for businesses dealing with new clients or those in industries where payments are less predictable.
REIL Capital's funding network offers both recourse and nonrecourse factoring options. Your funding advisor will guide you in choosing the structure that aligns best with your customer profile, industry, and how much risk you're comfortable taking on.
Invoice Factoring vs. Traditional Business Loans
Invoice factoring and traditional business loans both provide capital, but they work in fundamentally different ways. With invoice factoring, you're selling an asset—your unpaid invoice—instead of borrowing against your business. No new debt shows up on your balance sheet, you won't need a personal credit check, and approval is based on your customers' creditworthiness, not yours.
On the other hand, traditional loans come with a need for strong personal credit, collateral, and a stack of paperwork that can take months to process. Invoice factoring? It can get you funds in just 24 hours with minimal documentation. For many small and mid-size businesses, especially those that banks have turned away, invoice factoring is often the faster and more accessible route.
Wondering about other financing options? REIL Capital also provides business lines of credit, bridge financing, equipment financing, and SBA 7(a) loans.
Join our network of happy customers!
What Is Invoice Factoring?
Invoice factoring is a way for businesses to quickly get cash by selling their unpaid invoices, or accounts receivable, to a factoring company at a discount. Instead of sitting around waiting for 30, 60, or even 90 days for customer payments, you can receive up to 90% of the invoice amount in just 24-48 hours.
Here's how it plays out: The factoring company takes over and collects the payment directly from your customer. Once they get the full payment, you receive the leftover balance, with a small cut taken for the factoring fee, usually about 1-5% of the invoice value.
How Invoice Factoring Works — Step by Step
- You deliver goods or services and send an invoice to your customer.
- You submit the invoice to the factoring company.
- You receive an advance — typically 80-90% of the invoice amount within 24 hours.
- Your customer pays the factoring company based on the original payment terms.
- You receive the remaining balance after subtracting the factoring fee.
What sets invoice factoring apart from a loan is that it doesn't burden your balance sheet with debt. You're transforming an asset (the receivable) into cash — not borrowing with future earnings on the line.
Invoice Factoring vs Invoice Financing
Sure, people often mix them up, but invoice factoring and invoice financing play out quite differently:
| Feature | Invoice Factoring | Invoice Financing |
|---|---|---|
| Who collects? | The factoring company handles customer contact | You handle collections yourself |
| Customer awareness | Customers are aware of the factor | Usually kept confidential |
| Advance rate | Typically 80-90% of invoice amount | Typically 80-90% of invoice amount |
| Best for | Companies that prefer outsourcing collections | Companies keen on maintaining customer rapport |
| Cost | Factoring fee ranges from 1-5% | Monthly interest on advance ranges from 1-3% |
Reil Capital offers both choices. For a lot of small businesses, factoring tends to be the easier route — it lifts the hassle of pursuing payments, giving quicker access to cash. Who wouldn't want that?
Accounts Receivable Factoring
Accounts receivable factoring, often known as AR factoring, can transform your entire receivables portfolio into working capital. We're not just talking about individual invoices here. If your business regularly sends out B2B invoices and you prefer a reliable cash flow over a one-time boost, this could be perfect for you.
Industries That Benefit Most
- Staffing agencies — They've got to handle payroll every week, but clients might not pay until the end of the month.
- Trucking & freight — Covering fuel and driver fees upfront, while brokers may take 30 to 60 days to pay.
- Construction — Paying for materials and labor before those progress payments hit the account.
- Manufacturing — Purchases for raw materials often happen weeks ahead of receiving customer payments.
- Government contractors — Dealing with payment cycles stretching between 60 and over 90 days.
Partnering with Reil Capital, AR factoring lines kick off at $10,000 and can go up to $5M+. Plus, there are no binding long-term contracts — you only factor when you find it necessary.
Invoice Factoring Rates
If you're diving into invoice factoring rates, having a grip on them is essential for comparing providers and nailing down the real cost of factoring. Typically, these rates hover between 1% and 5% of the invoice value, influenced by several key factors.
What Affects Your Factoring Rate
- Invoice volume — It's simple: the more invoices you factor each month, the lower your rate per invoice usually gets.
- Customer creditworthiness — Invoices tied to Fortune 500 companies are less costly compared to those from startups.
- Payment terms — Need to factor an invoice? Net-30 terms are lighter on the wallet than net-90.
- Industry — Certain fields naturally come with lower default risks, and that generally translates to lower fees.
- Contract structure — Opting for spot factoring (on a per-invoice basis) generally comes with a heftier price tag than whole-ledger factoring.
Example: Cost of Factoring a $50,000 Invoice
Let’s say you're working with a 2% factoring rate and a 90% advance:
- You snag: $45,000 upfront (that's your 90% advance).
- Factoring fee: Comes in at $1,000 (2% of $50,000).
- Remaining balance after the customer settles: That's $4,000.
- Bottom line: You pay $1,000 for quick access to $45,000.
Invoice Factoring for Small Business
Small business invoice factoring really shines for companies experiencing growth that outpaces their cash flow. Is your business showing profits on paper but struggling with cash because clients take a month or three to pay up? Factoring steps in here, providing the cash you need without saddling you with debt.
Why Small Businesses Choose Factoring Over Loans
- No credit score requirement — it's your customers’ credit that matters for approval, not yours
- No debt on your books — you’re selling assets, steering clear of loans
- Grows with your business — as your invoicing goes up, so does your factoring line, automatically
- Fast setup — get approved in days, not weeks. Forget about tax returns or business plans.
Reil Capital focuses on small businesses with monthly invoicing from $10K to $500K. There are no minimums or long-term ties — use factoring when you need a cash flow boost, and stop when you don't. Simple as that.
