Identify eligible invoices
Focus on completed B2B or government work with clear documentation and customers that pay on established terms.
CASHMIGO BUSINESS FUNDING
Invoice Factoring and Accounts Receivable Financing
Explore invoice factoring and accounts receivable financing for eligible B2B invoices, payroll, inventory and business cash-flow needs.
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INVOICE FACTORING GUIDE01 02 03
Unlock cash tied up in eligible B2B invoices.
Invoice factoring allows a business to sell eligible accounts receivable to a factoring provider. The provider advances a portion of the invoice, collects payment from the customer and releases the remaining reserve after deducting agreed fees.
The quality of the customer who owes the invoice can be as important as the applicant’s own credit. Providers may review invoice validity, customer creditworthiness, aging, dilution, disputes, concentration and whether another lender already has a lien on receivables.
Confirm advance and reserve
Review the percentage advanced upfront, reserve retained, factoring fee, minimums, contract length and additional charges.
Plan customer communication
Understand whether customers will receive notice and where they will send payment after the invoices are assigned.
Information commonly requested
- Accounts-receivable aging report
- Copies of eligible invoices
- Contracts, purchase orders or proof of delivery
- Customer information and payment history
- Lien and existing financing information
Compare the structure
Factoring depends on specific receivables and customer quality. A line of credit may offer broader use and more privacy, while an asset-based facility can serve larger businesses with receivables, inventory and other eligible collateral.
COMMON QUESTIONS
What business owners often ask.
Does factoring create traditional loan debt?
Factoring is commonly structured as the purchase of eligible receivables rather than a loan, but the agreement, recourse provisions and accounting treatment should be reviewed carefully.
Will customers know about the factoring arrangement?
Often yes. Customers may receive an assignment notice and instructions to pay the factoring provider or a controlled account.
Can old or disputed invoices be factored?
Providers generally prefer current, valid and undisputed invoices. Aging, disputes, credits and customer concentration can reduce eligibility.
General educational information only. Availability, approval, amount, cost and timing depend on the complete application and the applicable funding provider.
