How Do Factoring Companies Work?
Factoring companies will buy your customer invoices and actually collect them, if necessary, on your behalf. They will typically pay you in two installments, around 80% or more of the total value of the invoice upfront and then the remaining (after they’ve taken their factoring fees) after the invoice is paid to them by your customer. You’ll need to assign your invoices to the factoring company, which may reach out to your customers to discuss the invoices or collect payment.