Invoice Factoring
A business sells its outstanding invoices to a third party at a discount in exchange for immediate cash.
- Advance paid shortly after invoice submission
- Factor collects payment from the customer
- Can be disclosed or confidential
Business Finance, Explained
Understand factoring and invoice financing before you decide anything.
Bibby Financial Services GmbH breaks down how factoring, invoice financing and other cash flow tools work in plain language — the mechanics, the trade-offs, and the questions worth asking a provider, without the sales pitch.
Informational content only. Bibby Financial Services GmbH does not extend credit, purchase invoices, or charge for advice.
Invoice to cash, mapped
See the full financing timeline
3
Core financing models explained
24–48h
Typical advance timeline in the market
70–90%
Common advance rate range on invoices
0
Fees charged by Bibby Financial Services GmbH — ever
What We Cover
Three ways businesses turn unpaid invoices into working capital
Each model shifts risk, cost and control differently. We lay out how each one actually functions.
Invoice Financing
A business borrows against the value of its unpaid invoices while retaining control of collections.
- Invoices used as loan collateral
- Business still collects from its own customers
- Often structured as a revolving credit line
Cash Flow Solutions
Broader tools — from supply chain finance to revolving credit — used to smooth timing gaps between costs and revenue.
- Working capital lines and overdraft facilities
- Supply chain and purchase order finance
- Cash flow forecasting practices
How Factoring Works
The typical lifecycle of an invoice, from delivery to final settlement
01
Invoice issued
A business delivers goods or services and issues an invoice to its customer with agreed payment terms.
02
Invoice submitted
The unpaid invoice is submitted to a factoring company or lender for review and verification.
03
Advance released
A percentage of the invoice value — commonly 70 to 90% — is advanced to the business, often within one to two business days.
04
Balance settled
Once the customer pays the invoice in full, the remaining balance is released minus the agreed fee.
Who This Is For
Built for owners and finance teams doing their own research
Whether you run a small logistics company waiting on 60-day payment terms or manage accounts receivable for a growing manufacturer, understanding the mechanics before you talk to a provider changes the conversation.
- Plain-language breakdowns of financing structures
- Questions to bring to any factoring or lending discussion
- No signup, no quotes, no sales calls
"The biggest mistake we see is business owners signing a factoring agreement without understanding whether it's recourse or non-recourse. That single clause changes who carries the risk if a customer never pays." — Common guidance found across independent SME finance resources
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