How does invoice factoring work?
Invoice factoring works like this: you sell your unpaid B2B invoices to a factoring company, which advances you typically 70-90% of the invoice value upfront, collects payment from your customer, then sends you the remainder minus its fee. It converts money you've already earned, but haven't received, into cash you can use this week. For businesses stuck financing 30-, 60-, or 90-day customer payment terms out of their own pocket, that waiting period is often the single biggest drag on growth. Quordx Capital matches you with factoring companies suited to your industry and invoice volume.
This page is one option inside our broader guide to Alternative Financing. See how it stacks up against the other alternative-funding tools we track.
Last updated · Reviewed by Cody Dreis
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The Factoring Process, Step by Step
Say you invoice a customer $100K on net-60 terms. You submit that invoice to a factor, which verifies it and checks your customer's creditworthiness, a key point: in factoring, your client's credit matters more than yours, because the client is who actually pays. The factor advances you 70-90% (here, $70K-$90K) within days. Your customer pays the factor when the invoice comes due. The factor then releases the reserve, the remaining balance, minus its factoring fee.
A few realities to know. Your customers typically learn a factor is involved, since payment redirects to the factor. Fees scale with how long invoices take to pay. And agreements differ on who eats the loss if a customer never pays: recourse factoring puts it back on you; non-recourse shifts qualifying losses to the factor at a higher fee. Read which one you're signing.
Is Factoring the Right Tool, or Is Something Else?
A/R financing / invoice factoring: (70-90% advanced): Best for B2B businesses with creditworthy customers and long payment terms; approval doesn't hinge on your credit score.
Business lines of credit: ($10K-$250K+): Best if your receivables gaps are modest and your profile qualifies; often cheaper than ongoing factoring.
Working capital loans: ($5K-$500K): Best for one-time crunches when you'd rather not involve your customers at all.
Purchase order financing: Best when the cash problem comes before the invoice: you need capital to fulfill a confirmed order.
How Quordx Capital Works
Quordx Capital's application takes roughly five minutes, and its AI engine, drawing on a network of 50+ vetted lenders, including specialty A/R funders, returns 3-7 matches ranked by fit and approval likelihood. You upload documents once, decisions generally come back in 24-48 hours, and initial funding typically follows within 3-7 business days.
What to Expect
Expect approval to ride on your customers' credit quality, which makes factoring reachable even with a thin or bruised credit file. Expect transparent fee schedules before you commit, and a frank comparison against a line of credit if that would cost you less. Quordx Capital charges borrowers nothing, and getting matched obligates you to nothing.
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Written by
Cody Dreis
Founder, Quordx Capital
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