Invoice factoring—sometimes also known as accounts receivable or debt factoring—is a financial transaction in which a business sells its accounts receivable (invoices) to a third-party financial company, known as a factor. This process provides the business with immediate cash flow rather than waiting for customers to pay their invoices.
We pay you in just a few days when factoring invoices. This is a far cry from waiting a month, two months, or even three months to be paid regularly. This speed is one of the many benefits of working with factoring companies like REV Capital.
Your factoring fee is dependent on your industry and is usually 1-3% of the total invoice value. Whether or not that number is closer to 1% or 5% will depend on our evaluation during the invoice factoring application process.
How does invoice factoring work if your customer doesn’t pay? The answer can vary, but REV Capital provides recourse factoring—this means that you will be asked to buy back the debt if your customer doesn’t pay. We, as the invoice factoring company, conduct a thorough credit evaluation of your customers beforehand to help avoid these situations.