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Invoice Factoring
Factoring Lines from $50K-$20MM per Month

Invoice Factoring: How It Works

Invoice factoring works by selling your invoices to a factoring company at a discount in exchange for immediate cash. Invoice factoring provides businesses with working capital that they need to meet their business obligations. Cash is used for payroll, equipment, daily operating expenses, and investing in new resources.

With TCI Business Capital, we can approve you for a customized program in as little as 15 minutes. You’ll be completely set up in just a few days. Once you’re set up, we’ll advance you a percentage of your invoice that same day, typically around 90 percent. While we wait for your customer to pay the invoice, you can focus on your business. Once your customer pays the invoice weeks or months later, we’ll deposit the remaining invoice amount into your bank account, minus a small fee for our services.

Although the process of invoice factoring is straightforward, here are a few other things you should know.

Invoice factoring is a type of financing in which a business sells its open invoices to a factoring company at a discount in exchange for same-day payment.

Invoice Factoring Benefits

Invoice factoring offers many benefits to businesses.

First, the immediate access to cash enables companies to meet business obligations and grow. With the increased cash flow, companies eliminate the stress and worry over payroll and daily operating expenses and can focus on growing their company.

Second, factoring is not a loan, so no additional debt is acquired.

Finally, factoring companies like TCI Business Capital provide value-added services such as invoice support, AR management, online reporting, credit checks on current and potential customers, and more. These factoring services free up time and resources so business owners can serve their customers and grow their business.

Cost of Invoice Factoring

The cost of invoice factoring is referred to as the factoring rate and is based on a number of variables. These include the monthly dollar amount you are factoring, credit and payment history of your customers, and the expected payment terms.

Because no two companies are the same, TCI Business Capital customizes factoring programs to meet the specific needs of each client. These factoring programs provide clients a low-cost, long-term value in financing, along with superior customer service.

Below are some examples of how much factoring costs. – These are just examples and not our actual rates.

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Flat Factoring Rate

Tiered Factoring Rate

Prime Plus Program

Monthly Volume: $200,000 Monthly Volume: $200,000 Monthly Volume: $200,000
Advance Rate: 90% Advance Rate: 90% Advance Rate: 90%
Factoring Rate 1-60 Days: 4.00% Factoring Rate 1-45 Days: 2.00% Prime Rate + 2: 5.00% + 2.00%
Recourse: 60 Days Factoring Rate – An Additional % Every 15 Days: +2.00% Factoring Rate: 3.00%
Recourse: 60 Days Recourse: 90 Days
Flat Rate Example Tired Rate Example Prime Plus Example
Invoice Value: $1,000 Invoice Value: $1,000 Invoice Value: $1,000
Advance Amount:
$1,000 x 90% = $900
Advance Amount:
$1,000 x 90% = $900
Advance Amount:
$1,000 x 90% = $900
Invoice Paid: 50 Days Invoice Paid: 50 Days Invoice Paid: 30 Days
Factoring Fee:
$1,000 x 4.00% = $40
Factoring Fee:
$1,000 x 4.00% = $40
Factoring Fee: Flat 90 Day:
$1,000 x 3.00% = $30
Final Disbursement:
$100 – $40= $60
Final Disbursement:
$100 – $40 = $60
Interest Fee (Prime +2):
$1,000 x 0.583% = $5.83
Total Cash from Factoring:
$900 + $60 = $960
Total Cash from Factoring:
$900 + $60 = $960
Total Factoring Cost: $35.83
Final Disbursement: $64.17
Total Cash from Factoring: $964.17

Industries that Use Invoice Factoring

Since 1994, TCI Business Capital has provided invoice factoring programs to a variety of B2B industries.

  • Oilfield Services
  • Staffing Agencies
  • Trucking & Freight
  • Telecom & Wireless Companies
  • Technology
  • Utility & Pipeline
  • Renewable Energy
  • Government Contractors
  • Other Service Industries

how to qualify and apply for invoice factoring

How to Qualify for Invoice Factoring

Companies can easily qualify for invoice factoring. With TCI Business Capital, you need a minimum of $50,000 in monthly invoices to qualify. Our factoring lines go up to $20 million per month, giving you plenty of room to grow.

To qualify, we take a look at your customers’ credit and payment history rather than yours. Companies that don’t qualify for a bank loan or line of credit can easily qualify with factoring.

How to Apply for Invoice Factoring

If you’re tired of waiting to get paid and want to speed up your cash flow, apply for invoice factoring today. You’ll get paid same day on your invoices, giving you the ability to maintain and grow your company.

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