Invoice Financing

Invoice financing lets you sell invoices to a lender, who fronts you a portion of the invoice amount. The remaining percent (usually 20%) is held until the invoice is paid.

Maximum Advance Amount

Up to 100% invoice amount



Until the customer pays the invoice


Factor Fee




As quick as 1 day


Learn More

What is Invoice Financing

Invoice financing—sometimes called accounts receivable financing—allows business owners to finance outstanding invoices. Invoice financing companies advance you cash collateralized by your unpaid invoices, giving you an excellent way to put money back into your business. With invoice financing, you can get a fast advance of about 85% of the value of your invoices, with most of the other 15% paid to you later.


  • No need to wait for invoice payment
  • Invoices serve as collateral
  • Based on credit of the invoiced business


  • Can have higher fees than traditional financing
  • Fees based on time for invoice to be paid off


Who Qualifies for invoice Financing

Any business with a business-to-business model can qualify for invoice financing, as long as they currently have outstanding receivables.

The lenders you will deal with don’t care as much about your revenue, profitability, or time in business.

Since your invoices will act as the loan’s collateral, lenders just want to make sure the invoices make sense for them to finance. The rest of your business isn’t too important to them.

The maximum amount you can qualify for depends on the total amount and quality of your invoices, as well as on your creditworthiness.

It is important to note that some invoice financing lenders take a look at your credit report, too.


Most Customers Who Were Approved Had

Annual Revenue

Over $130k

Credit Score


Time in Business

Over 1 year


How to Apply

An invoice financing application is a fast and simple process. Your invoice determines the amount and terms of the financing you qualify for, the invoice itself will be the most important part of the application process. Some invoice financing companies will look at your credit score and business financials as well.

Most invoice financing companies have a streamlined, online application. Companies like BlueVine or Fundbox will typically connect to your business’s accounting program, making it easy for you to upload the invoices you need financed.

You Will Need These Documents

  • Driver’s License
  • Voided Business Check
  • Bank Statements
  • Credit Score
  • Outstanding Invoices


How Does Invoice Financing Work?

A very frustrating aspect of running a growing business is waiting for invoices to be paid—especially when some customers don’t pay on time.

Delayed payments mean you can’t funnel that capital back into your business right away, which ties up your working capital and creates an entire host of trouble.

At Common Funding, we see this problem quite often with small business owners. That’s why we offer accounts receivable financing on our marketplace.

With accounts receivable financing, you have the chance to get paid for your invoices right away—no need to wait.

How Invoice Financing Aids Cash Flow

Suppose you could guarantee you’ll see cash for invoices right away?

That’s essentially what invoice financing can do for your business.

While invoice financing is sometimes a fairly expensive way to fund your business operations, it gives you more predictable cash flow, helping you smooth out your operations from month-to-month.

If you’re running short of capital or urgently need to meet upcoming expenses—like taxes, payroll, or even getting started on your next project—then invoice financing can ease the burden on your business.


How Invoice Financing Works

Once you agree to collateralize some of your invoices for a loan from a financing company, they’ll advance you typically around 85% of the total value of your invoices.

The remaining 15% gets held in reserve and subjected to fees until your customer pays their invoice off.

From that 15%, your lender first collects a processing fee—often around 3%. They’ll then charge a “factor fee” depending on how long it takes for your customer to pay, this is almost always calculated on a weekly basis.

For example, many lenders charge 1% each week until payment.

Then you’ll receive that 15% minus those fees—which are essentially the price you’re choosing to pay for cash now instead of waiting until your customer can complete your invoice.

Invoice financing is a convenience fee for your business’s working capital.

A Different Kind of Invoice Financing: Invoice Factoring

Although that’s the typical experience, there are other kinds of invoice financing.

Some invoice financiers simply advance you 100% of your outstanding invoices. In return, you pay the lender back weekly over a set period of time—often around 12 weeks—until the advance gets cleared.

In this case, you’re never waiting for the customer to settle your debt, although this sometimes means your lender will collect from your customer instead.

Another type of financing that falls under the realm of invoice financing is invoice factoring.

Invoice factoring is very similar to invoice financing with one notable difference: the invoice factoring company is purchasing your accounts receivables. And in this case, most of these factoring companies will collect from your customer on your behalf.


What Will Invoice Financing Cost?

Invoice financing can be an expensive way to receive funding for your business. But it’s essentially the cost of having cash on hand now, instead of later.

Here’s a view into what the cost structure would look like.

Financing & Fees for Invoice Financing

Imagine you have a $100K invoice with 30-day terms.

A financing company might immediately advance you 85% of that amount—$85K—and hold $15K in reserve.

Your customer then pays that invoice 2 weeks later. After subtracting the 3% processing fee of $3K, the financing company keeps its factoring fee—1% per week, which in this example is 2% or $2K—and gives you the $10K left over.


When is Invoice Financing Worth the Cost?

You might think that  $5K is a high price to pay—but that all depends on your business’s financials.

If you needed money to make payroll a week after sending out that invoice, then your accounts receivable financing lender’s fees won’t seem too bad after all.

Your business’s financial situation might seriously benefit from extra cash flow—so capital right away could definitely be worth those fees.