Frank Business Solutions
Invoice factoring
Turn unpaid invoices into working capital.
If your business delivers products or services now but waits to get paid, invoice factoring may help close the cash-flow gap—without starting with another blind online application.
A potential fit when you:
- Invoice commercial or government customers
- Offer payment terms instead of collecting immediately
- Have eligible accounts receivable
- Need cash flow for payroll, inventory, operations, or growth
What invoice factoring is
Get access to cash tied up in eligible invoices.
With invoice factoring, a business sells eligible unpaid invoices or accounts receivable to a financing company. The business receives an advance, the customer pays the invoice according to its terms, and the remaining eligible amount is released after applicable fees.
Unlike a conventional term loan, the transaction is evaluated heavily around the invoices, the customers responsible for paying them, and the quality of the receivables. Program structure, advance amounts, fees, and eligibility vary.
How invoice factoring works.
1. Deliver
You provide an approved product or service to a business or government customer.
2. Invoice
You issue an eligible invoice with payment terms and submit it for review.
3. Receive an advance
After approval and verification, a percentage of the eligible invoice may be advanced.
4. Customer pays
When the invoice is paid, the remaining eligible balance is released after applicable fees.
Understand the factoring structure before you sign.
Two proposals can advance against the same invoices and still produce very different cash flow, customer interactions, and risk.
| Term | What to confirm |
|---|---|
| Advance | The percentage of an eligible invoice initially made available to the business. |
| Reserve or holdback | The portion held until the customer pays, including when and how the remaining eligible balance is released. |
| Factoring fee | How the fee is calculated, how often it increases, and whether minimums or additional charges apply. |
| Recourse | Whether the business must repurchase or replace an invoice if the customer does not pay and which nonpayment risks are covered. |
| Notification and lockbox | Whether customers are notified and directed to pay the factor or a controlled account. |
| Customer concentration | How much of the receivables depends on one customer and whether that limits eligible funding. |
| Customer eligibility | Which customers and invoices qualify based on credit, disputes, performance, terms, aging and verification. |
Advance percentages and advertised rates do not tell the whole story.
Review reserves, fees, concentration limits, minimums, recourse, notification, verification and termination language together.
For a broader side-by-side review of net proceeds, total cost, payment burden, and contract terms, use our business financing offer comparison checklist.
Review reserves, fees, concentration limits, minimums, recourse, notification, verification and termination language together.
For a broader side-by-side review of net proceeds, total cost, payment burden, and contract terms, use our business financing offer comparison checklist.
Who it can help
The two-question starting test.
Do you have accounts receivable?
Do you invoice customers on payment terms?
If both answers are yes, factoring may be worth evaluating. Frank will help determine whether the receivables and customer base fit a realistic program.
Common industries
Manufacturing • Staffing • Consulting • Distribution • Trucking and transportation • Food services • IT services • Security services • Government suppliers • Medical-product suppliers • Machine shops • Installation and delivery businesses
Industry alone does not determine eligibility. Customer credit, invoice quality, liens, taxes, and financial condition may also be reviewed.
What Frank will review with you.
The goal is to determine whether factoring fits the way your business bills and gets paid before you spend time assembling a full package.
- Accounts-receivable and accounts-payable aging reports
- Customer list and concentration
- Sample or outstanding invoices
- Recent complete business bank statements
- Basic financial information or accounting reports
- Existing liens, tax matters, or current financing
Exact documentation varies by transaction and financing provider.
A focused review of the receivables.
Frank reviews whether the invoices, customer base, billing process and existing obligations fit a realistic factoring path before asking you to assemble a complete package.
Your information is not sold as a marketing lead
With your authorization, it may be shared with selected third-party lenders or funding partners appropriate for the request. Partner systems, personnel and privacy practices may vary after submission.
20+ years of business-financing experience
You work directly with Frank—not a call center, automated sales funnel or rotating group of brokers.
If factoring is not the right fit, Frank can help compare a business line of credit, business term loan, or another working-capital structure.
Invoice factoring questions.
Is invoice factoring the same as a business loan?
No. It is structured around the sale or financing of eligible invoices and accounts receivable rather than a conventional installment loan. Your legal and accounting advisors can explain how a specific agreement should be treated.
Do I need to factor every invoice?
Some programs may allow selective use, while others have different requirements. Frank will explain the available structure before you proceed.
What matters most for approval?
The strength of the receivables and the creditworthiness of the customers responsible for paying them are important. Business structure, financial condition, taxes, existing liens, and documentation may also be considered.
How much does invoice factoring cost?
Fees depend on factors such as invoice volume, customer payment terms, concentration, risk, and program structure. Frank can help you compare the full economics of an actual proposal instead of relying on an advertised headline rate.
How quickly can a factoring facility be established?
Timing depends on the completeness of the package, invoice verification, customer review, lien searches, and underwriting. No approval or funding timeline is guaranteed.
What is the reserve or holdback?
The reserve is the portion of an eligible invoice not included in the initial advance. After the customer pays, the remaining eligible balance is generally released after applicable fees and adjustments. Some programs may use a different structure.
What does recourse mean?
Recourse describes circumstances in which the business may have to repurchase or replace an unpaid invoice. The agreement should explain which nonpayment risks remain with the business and which, if any, are assumed by the factor.
Will my customers know I am factoring?
Often they will. Many programs require notice and direct payment to the factor or a controlled lockbox. The communication method and payment instructions should be understood before closing.
Before you submit another application, talk to Frank.
A short conversation can determine whether your receivables are worth pursuing for factoring—and what information would be needed next.
All financing is subject to application, verification, underwriting, and program availability. Terms, advance amounts, fees, and timing vary. Frank Business Solutions does not guarantee approval or funding.