No Obligation, Pre-Qualification
Compare Factoring Companies Before You Sign With One
Advance rates, fees and recourse terms move a long way between one factoring company and the next. Sterling Street Financial puts your invoices in front of an extensive network of funders and factoring companies, so you can weigh those three things side by side rather than accepting the first offer you come across.
How Accounts Receivable Factoring Works When You Have More Than One Offer
Accounts Receivable Factoring, often termed “Invoice Factoring,” is a process where businesses sell their outstanding invoices to a factoring entity at a discounted rate. That entity then takes on collecting the payment from your customers. Every factoring entity prices that purchase differently, so which offer you take affects the cost as much as the decision to factor in the first place.
We work with a diverse network of funders offering over 10 different business funding programs, with approvals ranging from $5,000 to $1,000,000. For invoice factoring specifically, our network supports funding up to $1 million. That range lets us source offers on a single large invoice or on an entire receivables ledger, and it lets us keep looking when the first advance rate that comes back is not competitive.
Your own credit history is rarely the deciding factor here. We have helped a lot of business owners who had some trouble with their credit, prior bankruptcies, and even tax liens, and factoring is the program where that history weighs least, because the customer paying the invoice is the one being underwritten. Businesses operating for at least three months that can document a sales history are encouraged to apply, and there is no fee to apply. Ledgers where the invoice waits on someone else's payment calendar are where this comes up most: wholesale suppliers waiting on retail buyers, construction contractors invoicing commercial clients that pay on their own schedule, and e-commerce suppliers selling into marketplaces that settle weeks after the shipment leaves.
- Advance Rates Compared Across Funders
- Your Invoices Carry the Approval
- Cash Flow Without Added Debt
- Your Customer’s Credit Does the Work
See what your business qualifies for.
One application, compared across our extensive network of funders. On average, funding is received within 2-4 business days.
Deciding How to Factor: Recourse, Advance Rates and Your Customers
The primary focus of factoring entities is the creditworthiness of your clients rather than your business. If your client has a good credit history and is deemed reliable, the factoring company will typically buy up to 85%-90% of the invoice value. Once they collect the payment from your client, they will then pay you the remaining balance, deducting their service fees. Advance percentages and service fees move independently from one funder to the next, which is why we quote them together rather than one at a time.
- Cash against work you have already delivered and invoiced.
- The factoring company takes over collection from your customer.
- Credit checks are based on your clients, not your business.
- Payment timing you can plan payroll around instead of guessing at.
Factoring turns an invoice into cash quickly, and it generally costs more than a traditional loan to do it. The other limit is that approval depends on your customer: if the factoring entity considers that client unreliable, the invoice will not be bought. A second funder in the network may read the same customer differently, so a decline from one is not a decline from all.
Approved businesses generally meet the following criteria:
- Advance Rate: 85%-90% of invoice value
- Underwriting: your customer’s credit rather than your own
- Time in Business: 3 months+, with a documented sales history
- Funding Speed: as little as 24 hours
The bar sits lower here than on most programs because the invoice is doing the work. If your customers pay their bills on time, a thin credit file of your own is rarely what decides it.
Factoring involves selling your receivables for immediate cash, whereas a loan adds to your debt. Factoring doesn’t appear as a liability on your balance sheet. That distinction matters if you expect to apply for a term loan or a line of credit later, and it is one of the first things our funding specialists walk through with you.
In Recourse factoring, if the client doesn’t pay the invoice, the business has to buy it back. With Non-recourse factoring, the factoring entity assumes most of the non-payment risk, but it generally comes at a higher cost. Which structure fits depends on how concentrated your customer base is. A ledger built on a handful of large accounts carries different exposure than one spread across dozens of small ones, and the right answer changes the price you should be willing to pay.
The factoring entity usually has a set timeframe for collecting payments, and if the client runs past it, penalties or fees can apply depending on the agreement. Compare those timeframes before you sign. A funder with a slightly lower advance rate and a longer collection window often works out cheaper than the headline number suggests.
Typically, the process is discreet, and clients aren’t informed about the sale of their invoice. However, this might vary based on the factoring company’s policies. If keeping the arrangement private matters to you, say so up front and we will narrow the search to funders whose policies match.
No, while both involve receivables, Invoice Financing uses the receivables as collateral for a loan, whereas in factoring, the invoices are sold. Both are on the table here, and which one we source for you depends on whether you want the receivable off your books or simply pledged.
Steps to Secure Business Funding with Sterling Street Financial
Submit Your Online Application
Fill out the online form. It asks what your business does, what the money is for, and what your revenue looks like. Call, chat or email if a question comes up.
Talk to Our Experts
A funding specialist reads your file and calls you with what the funders in our network sent back — the amounts, the costs and the repayment schedules.
Get Funded!
Choose the offer you want. Approved funds reach your account in as little as 24 hours, and most requests fund within 2-4 business days.
A Few Minutes to Apply
Fill out our online form and get approved quickly.
Compare Options
Both secured and unsecured loans with no personal guarantee.
Customize Terms
Choose what best suits you and your company’s needs.
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Funds in as little as 24 hours, directly to your account.
Take your business to new heights.
Tell us the amount you are after and what your business takes in each month, and we will point your application at the programs that fit. No application fees, no obligation, and no impact on your credit score.