Tired of waiting 30, 60, or even 90 days for customers to pay their invoices? Invoice Financing (also called Accounts Receivable Financing or Factoring) lets you turn those unpaid invoices into immediate working capital.
Here's how it works: You sell your outstanding invoices to a financing company (the "factor"). They advance you a large percentage of the invoice amount upfront – typically 70% to 90% – often within 24 to 48 hours. The factor then collects the payment directly from your customer. Once the invoice is paid, the factor sends you the remaining balance, minus their fee (the "discount rate").
Khojie helps you navigate both options to find the best fit.
Sarah's marketing agency completed a $50,000 project for a client with Net 60 payment terms. Needing cash for payroll, she factored the invoice. Khojie connected her with a factor who advanced her $42,500 (85%) within 24 hours. When the client paid the factor 60 days later, Sarah received the remaining $7,500, minus the factor's fee.
Waiting for payments can cripple a business. Invoice financing offers significant advantages:
This solution is particularly effective for:
💡 Khojie Advantage: We quickly assess your invoices and connect you with the right factoring partners, ensuring competitive rates and rapid funding to solve your cash flow needs immediately.
The primary cost is the discount rate (or factor fee), typically ranging from 1% to 5% of the invoice value per month it remains outstanding. The longer your customer takes to pay, the higher the total fee.
Example Calculation:
Other potential fees might include application fees, processing fees, or service fees. Khojie ensures transparency by helping you understand all costs upfront.
Khojie can help you weigh the pros and cons of each based on your risk tolerance and customer base.
With invoice factoring, yes, as the factor collects payment directly. Some invoice financing structures allow you to maintain the collection relationship (confidential factoring), though this might have different terms.
One of the biggest advantages! After initial setup and invoice verification, funding often happens within 24-48 hours – much faster than waiting weeks for bank loans.
It can be more costly than traditional bank loans, but the fees are often offset by the immediate cash flow benefit and the ability to take on new business you might otherwise miss. Compare the fee against the cost of *not* having the cash.
Invoice financing advances cash based on specific unpaid invoices. A line of credit provides a revolving credit limit you can draw on for various needs, usually secured by general business assets or personal guarantee, and relies more heavily on your creditworthiness.
Stop waiting weeks or months for customer payments. Improve your cash flow today with fast and flexible Invoice & Receivables Financing through Khojie.
