What is the benefit and the cost of invoice factoring?

A major benefit of Invoice Factoring is the availability to small businesses that have no established credit. Because you’re selling accounts receivables, the credit score of your customers is taken in to account but yours is irrelevant. You can access cash very quickly, which may allow businesses with regular monthly operating expenses to offer Net 30 and Net 60 day terms to customers, and Invoice Factoring is easier to get than business loans. Finally, setting up Invoice Factoring is relatively quick compared to other kinds of business financing.

The typical interest rate for Invoice Factoring will range between 1.5 and 3.5 percent per month, depending upon the size and credit score of the company paying the invoice.