Invoice Factoring Defined
What is Invoice Factoring and How Exactly Does It Work?
What is invoice factoring? Good question. Basically, invoice factoring frees up money you’re owed from unpaid invoices. Unlike a business loan, factoring gives you cash that you have already earned, so the working capital provided gives you more flexibility without the added burden of debt. This form of financing is generated from a business's unpaid invoices, which are assigned to a factoring loan company. When we take on your pending invoice, we’re giving you the money you’re owed from your customer upfront, minus a small fee (that’s how we keep our side of the business running). This allows you to invest in your company when and how you need to instead of waiting to be paid by your customers.
You bring us the invoice and set up an account, and then Security Business Capital performs a few due diligences and gets you working capital fast, oftentimes within 24 hours. We would then collect the unpaid invoice for a small fee. Companies like oil and gas services, manufacturers, transportation, temp staffing, and business services can use invoice factoring to generate cash on hand.