For many small and medium-sized businesses, managing cash flow is a constant challenge. Whether you’re waiting 30, 60, or even 90 days to get paid, those unpaid invoices can create a financial bottleneck that hinders growth. That’s where factoring becomes a powerful tool. Factoring allows companies to access working capital quickly, without taking on debt, making it an ideal solution for businesses that need immediate funds to operate or expand.
What Is Factoring?
Factoring is a financial transaction in which a business sells its accounts receivable (invoices) to a third party known as a factoring company. In return, the business receives a cash advance — usually between 85% to 95% of the invoice value — almost immediately. Once the factoring company collects payment from the customer, the remaining balance (minus a small fee) is released to the business.
Unlike traditional bank loans, factoring is not based on your company’s credit score but on the creditworthiness of your customers. This makes factoring an excellent option for growing businesses that may not yet qualify for bank financing.
How Factoring Works
The process of factoring is straightforward:
- You invoice your customer.
- You sell that invoice to a factoring company like American Receivable.
- You receive an advance on the invoice amount, often within 24 hours.
- The factoring company collects payment from your customer.
- Once payment is received, you get the remaining balance, minus a small factoring fee.
This infusion of capital can help you meet payroll, purchase supplies, invest in marketing, or seize a new business opportunity — all without waiting for slow-paying clients.
Benefits of Factoring
Factoring offers a wide range of advantages for business owners looking to stabilize and grow their companies:
- Improved Cash Flow – The most obvious benefit of factoring is immediate access to cash. You no longer have to wait weeks or months to get paid.
- No New Debt – Since factoring is not a loan, you’re not taking on additional liabilities. This keeps your balance sheet clean and improves your credit profile.
- Flexible Financing – Factoring grows with your business. As your invoices increase, so does your access to capital.
- Outsourced Collections – The factoring company takes over the task of collecting payments, saving you time and reducing administrative costs.
- Focus on Growth – With reliable cash flow from factoring, business owners can focus on what matters most — growing their business.
Which Industries Use Factoring?
Factoring isn’t limited to any one industry. In fact, a wide range of businesses rely on factoring to meet their financial needs, including:
- Staffing Agencies – Cover payroll while waiting for clients to pay.
- Manufacturers – Buy raw materials and keep production lines running.
- IT and Consulting Firms – Fund ongoing projects and hire talent.
- Construction Companies – Pay subcontractors and buy supplies on time.
Any business that invoices customers with terms and needs faster access to cash can benefit from factoring.
Why Choose American Receivable for Factoring?
At American Receivable, we have over 45 years of experience providing factoring services to businesses across the country. We are proud to be consistently rated among the top factoring companies in the United States. Here’s what sets us apart:
- Fast Funding – We provide same-day funding so you can meet your financial obligations without delay.
- Transparent Pricing – No hidden fees or confusing terms. We offer straightforward, honest factoring solutions.
- Customized Plans – We tailor factoring programs to fit your specific business needs.
- Excellent Customer Service – You’ll work directly with decision-makers who care about your success.
- No Long-Term Contracts – Enjoy flexibility with month-to-month agreements and no minimum volume requirements.
We understand the unique pressures business owners face and how important reliable cash flow is. Our team is committed to helping you succeed with factoring solutions that make sense for your business.
Is Factoring Right for You?
If your business is growing faster than your cash flow or if you’re tired of chasing down payments, factoring might be the perfect fit. Many of our clients turn to factoring after being turned down by traditional lenders or simply because they want a faster, more flexible financing option.
By choosing factoring, you’re choosing to invest in your business’s future — with immediate results.
Get Started Today
American Receivable is here to help your business grow stronger, faster, and more efficiently. Let us show you how factoring can turn your outstanding invoices into immediate working capital.
Jack Stieber jack@americanreceivable.com 972-404-4726
Julie Adams julie@americanreceivable.com 800-297-6652
Brad Gurney brad@americanreceivable.com 972-404-4726
Dakota Stieber dakota@americanreceivable.com 800-297-6652
