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Invoice Factoring

Invoice factoring allows you to turn your unpaid invoices into up-front capital to support your cash flow.

What is invoice factoring?

Invoice factoring, also known as accounts receivable factoring, is a form of small business financing where a business sells its invoices to a factoring company in exchange for upfront funding. When the invoice amount is paid by the customer, the remaining balance is paid to the business owner minus a fee.

Invoice factoring allows you to receive the working capital you need to maintain operations and plan for the future, but without taking on the periodic fixed payments associated with a term loan. If slow-paying clients are stalling your ability to pay bills or meet payroll, invest in technology and equipment or hire more staffing, invoice factoring can help you bolster cash flow by liquidating your outstanding accounts receivable to meet your business needs.

Rather than waiting 30 to 120 days for your customers to pay you the money you need to run your business, invoice factoring provides you with working capital within 1-2 business days.

How does invoice factoring work?

After submitting your invoices to the lender for invoice financing, you’ll receive the amount of the invoice minus a percentage as payment. Once the client pays you, you satisfy the agreement with the lender. While it may be helpful to have the lender collect unpaid invoices on your behalf, understand that you will have less control over the collections process and that your clients may become aware of your cash flow shortages.

  1. Small business owners sell outstanding invoices to a factoring service (the factor) at a discounted rate

  2. The factor advances a lump sum up to 95% of the value of the invoice

  3. The factor then collects all payments directly from the client

  4. The factor sends the remaining balance to the business, minus any fees, which is typically an agreed-upon percentage

Loan amount from $10,000 to $1,000,000

Invoice Factoring Details


  • Invoice factoring provides a safe, immediate source of cash flow by releasing working capital that is tied up in unpaid invoices.

  • Having a lender collect invoices for you can help you save time spent on administration and chasing late payments.

  • Factoring provides flexibility as amounts can expand and contract with your sales volume.


  • Invoice factoring companies will verify your invoices with clients to ensure that they are accurate. Including a third party can affect customer relationships and also means that you will have to give up some control.

  • If your client has a weak payment history or credit score, it may affect your approval.

  • Invoice factoring can reduce the scope of additional borrowing and often has higher costs than a longer-term loan.

Qualifying Criteria 

Approval for a business cash advance from EJN Financial isn’t based on your credit score alone. We focus on the overall health of your business. Here are some factors we consider:

  • 550+ credit score

  • 12+ months in business

  • $10,000+ average monthly bank deposits

Documentation Required

We at EJN Financial want to make the funding process as simple as possible for you. Therefore, minimal documentation is needed for your application:

  • Signed one page funding application

  • 3-5 most recent months company bank statements

  • Full credit report

How To Apply

Pre-Qualify Online

To get prequalified, follow the "Apply Now" button and submit some basic business information.

Get Approved

After your submission has been processed by the underwriting team, we will reach out to discuss the options you qualify for.

Get Funded

Upon approval and accepting the offer, funds are deposited directly into your business bank account so you can use the money immediately.

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