Product 03 / Invoice factoring
Invoice factoring sells eligible unpaid B2B invoices to a financing provider for an advance. The fee depends on volume, customer quality, concentration, payment time, recourse terms, and the contract—not a headline rate alone.
Your credit is only checked when you send your application to the lender you choose.
How it works
Five steps, then it repeats. Factoring is a revolving facility — every paid invoice reopens the line for the next one.
Start with the business, customers, payment terms, and approximate invoice volume. A Nex specialist confirms the next information needed. Your credit is only checked when you send your application to the lender you choose.
Invoice your customers as usual, then submit eligible invoices under the agreed facility. The contract defines whether invoices may be selected or whether receivables must be committed.
After an eligible invoice is verified, the agreed advance is released and the remaining share is held in reserve under the facility terms.
Your customer pays the designated account or lockbox on the agreed terms. The facility documents define the collection process, notices, and follow-up responsibilities.
When the customer pays in full, the remaining reserve is reconciled and released after the contractual factoring fee and any disclosed charges.
As soon as the reserve clears, the line is open for the next invoice. Land a bigger contract and available capacity can change with eligible receivables, concentration limits, and the facility rules.
Your rate
Enter or slide to your approximate monthly invoice volume — the illustrative rate updates instantly. Rates improve as volume grows, as low as 1.5% for high-volume books.
Type an exact figure or drag the slider — your illustrative rate updates instantly. Actual eligibility and pricing are confirmed during underwriting.
Your illustrative factoring rate
2.0%
Your illustrative rate keeps improving as monthly volume grows.
At $150,000/month in eligible invoices.
Illustrative only, subject to underwriting — not an offer of credit. Your final rate is set by the funder based on volume, customer credit quality, days-to-pay, industry, and contract length.
Rates shown are illustrative and volume-tiered — they fall as your monthly invoice volume grows, as low as 1.5% for high-volume facilities. Complex or concentrated books may still be priced individually — ask our factoring specialist for a bespoke rate. See our disclosures for the full tier table and rate assumptions.
Fee basis / read this first
The real cost is the quoted fee applied over the time the invoice remains unpaid, plus any contract charges. Compare the same invoice, payment period, and reserve terms—not two headline percentages with different definitions.
Beyond the rate
A factoring facility is a service, not just an advance. These are the parts operators tell us actually decide whether a facility works day to day.
The factor verifies eligible invoices and follows up with your customers under the terms set in the facility agreement, so the chasing stops being your job.
Because approval leans on your customers, the factor reviews who you invoice — useful before you extend terms to a new buyer.
Your application, messages, and documents stay in the Nex portal instead of scattered email threads, and you can see where the file stands.
Advance, reserve, fee basis, minimums, setup and processing charges, term, renewal, and termination — presented together before you sign anything.
A Nex factoring specialist reviews the receivables brief and stays on the file, with multilingual support available.
Nex compares available recourse and non-recourse structures across funders instead of defending a single provider’s rate card.
Your credit is only checked when you send your application to the lender you choose.
Know the structure
Recourse factoring requires the business to repurchase or replace an invoice after a contractually defined non-payment event. Non-recourse may cover specified customer insolvency risk, subject to exclusions, and is generally priced differently.
01
Standard · lower cost
Non-payment risk stays with your business
02
Credit protection · higher cost
Defined insolvency risk moves to the factor
Read the definition of a covered loss before choosing non-recourse: disputes, offsets, and short-pays are commonly excluded. Nex can compare available recourse and non-recourse structures for the file.
Choose the right tool
Factoring is underwritten around eligible receivables and customer payment risk; loans and lines of credit are underwritten around the business, repayment source, and selected facility.
| Invoice factoring | Term loan | Line of credit | |
|---|---|---|---|
| What it is | Sale of receivables for immediate cash | Lump sum repaid over a fixed term | Revolving credit you draw and repay |
| Approval weighs | Your customers’ credit | Your credit and financials | Your credit and financials |
| Capacity grows with | Eligible receivables, within facility rules | Fixed — reapply to borrow more | Your limit — reviews to increase |
| Speed to cash | After invoice verification, on the facility schedule | After underwriting, signing, and any conditions | Draw anytime once in place |
| Debt on your balance sheet | Generally structured as a receivables purchase. Accounting treatment depends on the facility and circumstances. | Generally debt; confirm treatment for the facility | Generally debt on the drawn balance; confirm treatment for the facility |
| May suit | Customers pay in 30–90 days and growth outruns cash | A defined purchase or project | Occasional, short-lived gaps |
Already factoring elsewhere?
Moving between factoring companies is a standard, well-worn process — we coordinate the buyout with your current provider directly. What changes is what you pay and how you’re treated.
Who factors
Factoring may fit a B2B business with completed work, eligible invoices, creditworthy customers, and a recurring gap between delivery and payment.
Flagship vertical
Eligible freight bills and broker invoices may support a factoring structure for fuel, payroll, or another operating need while the customer remains on payment terms. Nex confirms the servicing model and available language support for the proposed facility.
02
Weekly payroll and corporate customers on payment terms can create a working-capital gap. Factoring may address that gap when the receivables and facility structure are suitable.
03
Custom and contract manufacturing with milestone invoicing and long production cycles.
04
Selling to retailers, restaurants, or industrial buyers on credit terms.
05
Subcontractors waiting on progress draws and holdbacks.
06
Service rigs, hot-shot, completions — fast-cycle invoice volumes.
Not listed? Factoring depends on the receivables and the customers, not the sector name.
Self-qualification
If most of these are true, factoring is worth a conversation. Underwriting generally weighs eligible customers and receivables heavily. Your credit is only checked when you send your application to the lender you choose.
A complete package helps the specialist confirm setup requirements and expected timing.
FAQ
The objections first — clients, fees, contracts, and whether it’s worth it at all.
Customer experience depends on the facility. A notified structure directs customers to an approved payment account and defines who handles follow-up; some providers may offer non-notification structures for eligible files. Nex explains the notification and collections model before you choose.
Nex presents the proposed per-cycle fee, reserve terms, minimums, setup or processing charges, term, renewal, and termination conditions before signing. Compare the complete fee schedule rather than a headline rate.
Contract terms vary by provider and proposal. Review the initial term, renewal mechanism, notice period, minimums, and termination fee together; Nex explains those terms before you decide.
It depends on the quoted fee, customer payment time, gross margin, and what earlier access to cash lets the business do. Compare the total expected factoring cost against the cost of waiting, borrowing, or declining work; if cash timing is not the constraint, factoring may not be the right tool.
The quoted fee must be read together with the fee period, customer payment time, advance rate, reserve, minimums, and contract term. Actual pricing depends on the receivables book and the selected facility.
The reserve is the part of an eligible invoice not included in the initial advance. When the customer pays in full, the reserve is reconciled and the balance is released after contractual fees and adjustments. Its size depends on the proposed facility and receivables risk.
Timing depends on diligence, signing, customer verification, any current-facility payout, and invoice validation. Nex confirms the expected setup and invoice-funding schedule for the proposed facility before you proceed.
It depends on the facility. Some programs permit selective or spot factoring, while others require a broader receivables commitment. Nex explains the eligible invoices, commitment, minimums, and fee basis before you proceed.
Specialist pricing / complex files
Use this dedicated request when the book needs concentration analysis, a current-facility buyout, or pricing by hand. The form submits to Nex’s factoring specialist path; general factoring requests can continue through Smart Apply above.
Use general Smart Apply insteadTell Nex about your receivables, payment terms, and current facility. A factoring specialist reviews the brief and explains the next information needed. Your credit is only checked when you send your application to the lender you choose.
Send my receivables brief