Inner Banner

What is Invoice Financing?

  • Invoice factoring Get invoice financing up to the full invoice amount
  • Invoice factoring No personal credit check required
  • Invoice factoring Funding can be received within 24 hours
  • Invoice factoring Minimal documentation needed for the application Process
  • Invoice factoring Interest Rates as low as .5% a month

What is Invoice Financing?

Invoice factoring, also known as invoice financing for small businesses, is a popular form of invoice funding that can provide immediate access to cash flow. With invoice funding, businesses can sell their outstanding invoices to a funder at a discount, in exchange for upfront funding. This allows businesses to free up cash that is tied up in unpaid invoices, and use those funds to cover expenses such as payroll, inventory, or other operational costs.

Reil Capital specializes in helping small businesses obtain invoice financing and invoice funding solutions that meet their unique needs. Our team works closely with a network of funders who offer competitive rates and flexible terms, so you can get the cash you need quickly and easily. Whether you need short-term financing to cover a cash flow gap, or a long-term solution to help you grow your business, we can help you find the right invoice financing option for your needs.

APPLY FOR Invoice Financing
Understanding the Details of Invoice Financing

In this section, we will provide you with a comprehensive overview of how invoice financing works. Whether you’re looking to improve your cash flow, increase your working capital, or streamline your invoicing process, this section will give you a solid foundation of knowledge to work from.

img

AMOUNT

Up to 90% of Invoice
img

TERM

1-2 Years
img

RATES

Starting at 12%
img

SPEED

About 3 Days

Essential Documents for Invoice Financing

Before you can apply, there are several important documents that you will need to provide to the lender. Having these documents ready can help speed up the application process and increase your chances of approval for invoice factoring.

Documentation Necessary:

  • Application
  • 3 Months of Business Bank Statements
  • Accounts Receivable Aging Report
  • Business Profit & Loss Statements
  • Business Balance Sheet

Qualifications:

  • $250,000 in annual revenue
  • 1+ Year in business
  • Unpaid Invoices

Additional information:

  • Invoices serve as collateral
  • Stop waiting for customers to pay
  • Credit Score is less important to financing decision

How Does Invoice Factoring Work?

Invoice factoring is a financing option that can provide businesses with quick access to working capital. Understanding the mechanics of this funding option can help you determine if invoice funding is the right choice for your business.

You send an invoice to your customer

You send an invoice to your customer

You submit the invoice to the factoring company.

You submit the invoice to the factoring company.

You submit the invoice to the factoring company.

The factoring company provides you with a cash advance that is worth 80% – 90% of the invoice face value.

Your customer pays the invoice

Your customer pays the invoice.

The factoring company sends the remainder of the invoice value to you, minus a factoring fee.

The factoring company sends the remainder of the invoice value to you, minus a factoring fee.

Apply Now

What You Should Know About Invoice Factoring Details

If you’re considering invoice factoring, which is a type of invoice financing, it’s important to familiarize yourself with the technical terminology involved and to recognize that some terms may be interchangeable. It’s essential to comprehend your responsibilities and alternatives, as with any form of financing. Carefully reviewing and comprehending your invoice factoring agreement is crucial, especially if you’re working with invoice factoring companies.

This will aid you in making informed decisions and fulfilling your obligations while also being aware of the invoice factoring costs, including invoice factoring rates. Some companies also offer invoice financing no credit check, which can be an option if you have poor credit or a limited credit history. Other options for financing your invoices include invoice loans and invoice factoring loans, which may be available through various invoice financing companies or invoice factoring services.

What You Should Know About Invoice Factoring Details
Advantages of Invoice Financing
  • Easy Approval Procedure: The invoice factoring approval process is usually simple, as it doesn’t typically require excellent credit, a lengthy business history, or collateral. Instead, invoice factoring companies tend to focus on the types and total amounts of invoices being purchased.
  • No Need of Security Deposit: Another advantage of invoice factoring is that it’s generally considered unsecured funding, meaning there’s no risk of losing assets if there’s a default, since there are no collateral requirements.
  • Instantaneous Cash Flow: By selling your future invoice payments, you can receive immediate cash flow, which can help boost your business’s financial situation in the short term.
Advantages of Invoice Financing
How is a business loan different from invoice factoring?

Invoice Factoring is a form of alternative financing where businesses sell their outstanding invoices or receivables to invoice factoring companies for a fee. It is not a traditional small business loan, as it involves the sale of an asset instead of borrowing money.

The financing companies rely on the credibility of the customers of the business, as they are the ones who will pay the invoices. Invoice factoring companies can collect payment directly from customers or indirectly through the business. For businesses with creditworthy customers, invoice factoring can provide working capital upfront.

Factoring providers offer two types of factoring: recourse and nonrecourse. Recourse factoring involves the business settling any unpaid or late invoice with the customer, while nonrecourse factoring involves the factoring company absorbing the debt of the unpaid invoice or late payment. The specific terms will be outlined in the invoice factoring agreement.

The ultimate aim of invoice factoring is to provide businesses with operating capital while they wait for customer payments. It is commonly used in certain industries such as trucking, staffing, and wholesale. Invoice factoring companies, invoice financing companies, and invoice funding companies are the main providers of this type of financing.

Advantages of Invoice Financing
Invoice Financing with Capital

Capital specializes in tailoring financing options for small businesses. We understand that every business has different needs, and we work hard to provide personalized solutions that work best for your business.

  • With many satisfied small business clients across the nation, our services are trusted and reliable.
  • Our application process is simple and efficient.
  • Our team of expert business advisors is dedicated to providing you with quick and reliable information on invoice funding.
  • We are committed to helping your small business succeed and offer a streamlined process for any additional funding needs you may have.
FAQ About Invoice FinancingSBA Express Loans FAQs

Yes, it is possible to get invoice financing with bad credit. Invoice financing companies focus on the creditworthiness of your customers, not your own credit score.

The cost of invoice factoring varies depending on the factoring company, the size of the invoice, and the creditworthiness of your customers. Generally, factoring fees range from 1% to 5% of the total invoice amount.

No, invoice financing is not a loan. It involves selling your unpaid invoices to a financing company in exchange for immediate cash. 

Small business factoring is a type of financing where a factoring company purchases a small business’s outstanding invoices for a fee, providing immediate cash flow.

Invoice discounting involves borrowing money against your outstanding invoices, while factoring involves selling your invoices outright to a factoring company. In invoice discounting, you retain control over collecting payments from your customers, while in factoring, the factoring company takes over the collection process.

Invoice finance is a broad term that refers to any type of funding that uses outstanding invoices as collateral, while factoring involves selling invoices outright to a factoring company for a fee.

Generally, any business that invoices other businesses and has outstanding invoices can be eligible for invoice factoring. The financing company will evaluate the creditworthiness of your customers to determine eligibility.