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Your Questions Answered About Invoice Factoring

Invoice Factoring FAQs

Find the answers to your questions about invoice factoring, factoring companies, and accounts receivable financing in our invoice factoring FAQ page.

What Is Invoice Factoring?

Invoice factoring is a cash-flow solution in which a business sells its receivables (invoices) to a factoring company at a discount in exchange for immediate working capital. Businesses use invoice factoring to improve their available cash to use toward payroll, expenses, or growth.

How Does Invoice Factoring Work?

Once you choose a factoring company that meets your business needs, the process of factoring is simple.

  1. When you are ready to fund, send your invoices to the factoring company.
  2. The factoring company advances you a percentage of the invoice value.
  3. Your customer pays the invoice to the factoring company on the agreed upon terms.
  4. The factoring company pays you the remainder invoice amount less a fee for the service.

Do I Qualify for Invoice Factoring?

TCI Business Capital provides factoring to companies providing business-to-business sales and services. You must bill your customers on net terms and invoice at least $50,000 a month on average.

How Long Does it Take to Get Approved & Setup for Invoice Factoring?

Once you speak with one of our factoring specialists and discuss your situation and cash needs, you will receive an approval in as little as 15 minutes. Our simple setup process will have you ready for your initial funding in as little as three business days. After your initial funding, we will fund you the same day we receive your invoices.

How Are Factoring Rates Calculated?

There are three common factoring rate types; flat, tiered, and prime plus. Factoring rates are calculated based on several variables including monthly invoicing volume, industry, and customer payment trends. See examples of factoring rates here.

What’s Your Advance Rate?

We typically advance 90 percent of the invoice amount.

invoice factoring FAQs - common questions about invoice factoring answered

How Long Do I Have to Factor?

There is no long-term contract. We offer month-to-month financing programs based on your business needs.

What Is Recourse Factoring?

With recourse factoring, any unpaid invoice that is uncollectible or in dispute is recoursed or sold back to the factoring client.

What Is Non-Recourse Factoring?

With non-recourse factoring, the factoring company takes on the full liability of the invoice. Typically the advance rate is lower, and the factoring fee is much higher with non-recourse factoring.

Does Invoice Factoring Create Additional Debt?

Unlike a loan, factoring does not create additional debt on your balance sheet.

Do I Have to Factor All of My Invoices?

No! With TCI Business Capital, you can factor some or all of your customers.  For the customers you choose to factor, all invoices should be submitted.

Want More Information on Invoice Factoring?

Still have questions or want to learn more about invoice factoring with TCI Business Capital? Fill out the form below or give us a call at 800-707-4845.

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