Invoice Financing
Invoice financing provides business owners with a way to cover their outstanding invoices and provide them with a more predictable cash flow. Funding amounts range from 60 – 100% of the outstanding invoice value. There is no minimum credit score required. Fees range from 1-3%, and you can be funded in as little as 1 day!
Applying is free and won't impact your credit score.
What Is Invoice Financing?
Invoice financing, also known as accounts receivable financing, is a financial solution where business owners receive immediate capital based on their outstanding invoices. Typically, financing companies can advance up to 85% of the invoice value, with the remaining 15% (minus fees) released upon invoice payment. This type of financing is easier to qualify for than traditional loans, making it a great option for B2B and service-based businesses to manage cash flow issues due to unpaid invoices.
How Invoice Financing Works
Invoice financing allows businesses to leverage their unpaid invoices to access immediate working capital. Here's how it typically works:
- Submit Invoices: You submit your outstanding invoices to the financing company.
- Receive Advance: The company advances up to 85% of the invoice value.
- Customer Payment: Your customer pays the invoice directly to the financing company.
- Receive Remaining Funds: You receive the remaining 15%, minus the lender's fees, once the invoice is paid in full.
Predictable Cash Flow
Smooth out your business operations with a predictable cash flow by guaranteeing you’ll see cash for your invoices right away.
Invoices Serve as Collateral
No need to tie up your assets in order to be advanced capital, your outstanding invoices will serve as collateral.
Get Funded in as Little as 1 Day!
With streamlined processes of analyzing your data and invoices, you can get approved and funded within a day!
Do I qualify?
Minimum Qualifications
600+ personal FICO score
At least 1 year in business
$100,000+ in annual revenue
What You Need To Apply
Basic info about your business
Business checking account
Last 3 months business bank statements
Costs of Invoice Financing
The cost of invoice financing includes:
- Processing Fee: Usually around 3%.
- Factor Fee: Typically 1-2% of the invoice value per week until the invoice is paid.
Types of Invoice Financing
Invoice Factoring: You sell your invoices to a factoring company at a discount. The factoring company then collects payment directly from your customers.
Accounts Receivable Line of Credit: Your unpaid invoices serve as collateral for a line of credit. You can draw funds as needed and pay interest on the balance.
How to Get Invoice Financing
Before applying for invoice financing, it's important to evaluate your funding needs. Here's a step-by-step guide to help you secure the necessary funds for your business:
1. Assess Your Funding Needs
- Identify Your Purpose: Determine the specific reasons you need funding. Invoice financing is particularly useful for alleviating cash flow problems due to unpaid invoices. Clearly defining your purpose will help you understand the amount of financing you require.
- Calculate the Amount: Make a detailed estimate of the total value of your unpaid invoices. This ensures you know how much advance you need to request and helps prevent borrowing more than necessary.
2. Evaluate Your Eligibility
When considering invoice financing, lenders typically focus on a few crucial factors:
- Business Revenue: Lenders will assess your business's revenue to gauge your ability to repay the advance once your invoices are paid. Typically, they look for $100,000+ in annual revenue. However, lenders in our network often have more flexible requirements, advantageous for newer or smaller businesses.
- Credit History: Your credit history is crucial in evaluating your financial reliability. Most lenders look for a personal FICO score of 600+. A higher credit score can improve your chances of receiving more favorable terms and lower fees.
- Time in Business: The length of time your business has been operational is another important criterion. Traditional banks usually require a business to be active for at least two years. In contrast, lenders in our network often require a minimum of one year. A longer operational history can convey stability to lenders, potentially leading to better terms.
3. Submit Your Application
Applying for invoice financing at Status Funding is designed to be quick and easy. Our online application process can be completed in just a few minutes. During the application, you will be asked to provide:
- Owner's Information: Personal details of the business owner(s).
- General Business Information: Basic information about your business, including its name, address, and type of business.
- Financial Statements: The last three months of bank statements to show cash flow.
- Identity Verification Documents: Documents to verify the identity of the business owner(s).
- Unpaid Invoices: Details of the invoices you wish to finance.
Once submitted, our advanced algorithm swiftly evaluates your business profile to match you with ideal lenders. If approved, you will receive invoice financing offers to review and select the best option that suits your needs. This enables you to access the capital your business requires, often within as little as 24 hours, streamlining the process to get you funded efficiently and effectively.
Pros and Cons
Funds can be available as quickly as within one day
Easier to qualify for compared to traditional loans.
The invoices themselves serve as collateral
Can be more affordable if customers pay on time
Can be more expensive than other financing options
If customers don’t pay, you may be responsible for repaying the advance
Our application process is easy.
1
Apply Instantly
Fill out our quick and easy online application. It only takes a few minutes and won't affect your credit score.
2
Discover Your Options
Receive personalized funding offers, carefully curated to align with your business goals and requirements.
3
Get Funded
Choose the best funding offer for you and access the capital your business needs in as little as 24 hours.
*The content provided on this page reflects the opinions and insights of Status Funding, based on our research, methodologies, evaluations, and various additional considerations. This information is accurate as of the initial publication date. Status Funding makes every effort to update and maintain the accuracy of this content to ensure its relevance and accuracy, however, the information may differ from what you may find on other platforms, including financial information sites, different service providers, or specific product pages. All information is presented without any warranty. We encourage you to carefully review the terms and conditions, relevant policies, contractual agreements, and all applicable details of the financial institution when considering offers. The ranges mentioned here do not represent pre-qualified offers. Ranges may be greater or less based on the information provided in your business financing application. Please be aware that Status Funding may receive compensation from financial institutions that are reviewed on this page if you proceed to obtain business financing through them.
