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Working Capital For Your Business When You Need It Most

How Invoice Factoring Works for Businesses

Many businesses are facing challenges. Ongoing effects of pandemic lockdowns, inflation, and supply chain issues are all making it difficult to maintain steady cash flow. Invoice factoring is a type of financial service that can be helpful, even for businesses that may not qualify for traditional funding like a bank loan or commercial loan. Let’s look at how factoring works, its main benefits, and how a business can apply for it.

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Factoring and how it works

Get Paid Faster With Invoice Factoring

You don’t have to wait on slow paying customers with invoice factoring. Check out the easy steps to get paid for your invoices in as little as 24 hours. 

Apply for Factoring: The process is quite simple and fast compared to applying for a bank loan. Complete applications can be approved within days.
Credit Limit:The factoring company investigates the customers you submit for factoring and establishes a credit limit.
Deliver: Your business delivers products and services to your customers as usual. You upload the invoices to the factoring company’s portal instead of sending to your customers.
Verification: After verifying that the product/service was delivered, the factoring company pays you the value of the invoice minus a transaction fee.
Payment: Your customer pays the factoring company.

Invoice factoring is a reliable alternative to more traditional means of financing for businesses, such as small business loans, commercial loans and small business lines of credit, among others.

Benefits of Invoice Factoring

Riviera Finance works with a variety of companies in the US and Canada to help them maintain cash flow and meet weekly financial demands.

Immediate Cash

Our process is built around immediate response to client needs, and the best cash turn around in the industry.

Quick Credit Checks

Receive Credit Checks on Your Customers

Low Risk

Competitive Rates and No Hidden Fees

Financial Freedom

No Debt is Created

Bad Debt Protection

Riviera takes on all the credit risk!

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How Does Invoice Factoring Work?

Any business that invoices its business customers then waits to be paid can apply for invoice factoring. It’s a type of financial service in which the factoring company purchases accounts receivable, allowing the client to receive immediate cash. Factoring helps businesses improve cash flow, providing working capital now, when it is needed to cover operating expenses and allows the company to take on more business. Invoice factoring shields them from the lag time involved in invoicing then waiting to be paid, plus rids businesses of the uncertainty from customers who may pay late.

In an ideal world, when businesses send out invoices, they are paid promptly. In the real B2B world, however, customers often require extended payment terms such as 30 – 60 days. When your customers are themselves having cash flow problems, it can delay payments. When invoices are factored, you are assured of receiving payment on a consistent schedule.

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Unlock Funding for Growth & Expenses

If your business needs working capital for growth or expenses, invoice factoring is a great solution. Below are some of the top advantages to invoice factoring for you business. 

Easier to Qualify for Than Bank Loans

business without a long history, collateral, or perfect credit often finds it hard to qualify for traditional loans. Invoice factoring is easier for many businesses to obtain. The factoring company will mostly look at the credit-worthiness of your customers who will be paying them.

You Don’t Take on Additional Debt

When you take out a loan, you incur debt. You have to pay off the interest as well as the principal. When you factor invoices, you aren’t taking out a loan so you aren’t taking on any debt. The fees are taken out of each transaction, so there’s no accumulation of interest or any other costs.

Save Time on Collections

When you are responsible for getting customers to pay invoices, you have to expend a great deal of time and effort on collections. When you factor invoices, the factoring company handles many of these responsibilities. Since the customers are no longer paying you directly, it saves you the hassle of having to run after late-paying customers.

Flexible Uses For Money

Other business financing options often come with restrictions on how the money can be used. A loan, for example, may be limited to uses such as buying supplies or equipment. Factoring, on the other hand, allows you to use the money for any business purpose. It’s basically the same as if your customer had paid you directly except that you can count on getting paid on a regular schedule.

Tips For Business Financing | Team Discussion

The Cost of Invoice Factoring

Every type of financing comes with certain fees. In the case of factoring, you aren’t paying interest, as with a loan. However, the factoring company does charge a fee with every transaction. The amount depends on several things:

Services - Invoice Factoring

Your Industry

Certain industries may command higher or lower factoring fees.


Factoring often comes with reserves that are held by the factoring company until the customer pays an invoice. Higher reserves result in lower factoring fees.

The Number of Invoices You Factor

When the fee is lower, you may be required to factor all of your invoices, which not all businesses prefer to do.

Length of Agreement

When you commit to factoring for a longer period of time, fees will be lower.

Whether You Have Recourse or Non-Recourse Factoring

With recourse factoring, the client (of the factoring company) is ultimately responsible for any unpaid invoices. Non-Recourse Factoring means that the factoring company assumes the credit risk on any invoices they factor. To cover the additional risk, they will charge you higher fees.

Pros and Cons of Invoice Factoring

As with any business financing options, there are pros and cons to factoring. 


  • Easy to get approved
  • Receive money quickly
  • Use the money for any business purpose
  • Get funding without taking on debt
  • Protect your business against unpaid invoices with non-recourse factoring


  • Can’t be used by all businesses. Only B2B businesses with accounts receivable will benefit from factoring. Retail stores, for example, aren’t eligible for factoring.
  • You may still be responsible for unpaid invoices if you’re doing recourse factoring.
The Riviera Difference White - RF Building
The Riviera Difference

Founded in 1969, Riviera Finance is nationally recognized as a leader in business financing and a top invoice factoring company. Riviera Finance provides full-service, non-recourse invoice factoring to growing companies.

We are the experts in invoice factoring and accounts receivable management. Riviera Finance maintains offices throughout North America to provide face-to-face service and expert financial solutions to small and medium-sized businesses. Currently serving more than 1,400 clients, Riviera holds an excellent credit rating, has shown consistent, positive earnings and maintains a diversified capital base.

We have more than 25 invoice factoring company offices located throughout the US and Canada to handle all of your invoice factoring needs.

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What Our Customers Are Saying

The personnel I deal with on a regular basis at Riviera are very friendly and extremely helpful. If I call with a question or concern, they are prompt in assisting me.

Marjie EllisonDallas, TX

For financing it can't get much easier. Our company has been growing for several years and the growth rates could not have been achieved without the additional financing that Riviera has provided.

Stan ShawPhoenix, AZ

Riviera helps keep a consistent cash flow and help us manage our receivables. They also help keep us from doing business with customers whose credit level is substandard.

John SavastenBirmingham, AL

Not only am I happy that I have a steady flow of cash when I need it but I am treated very well by the people who work there.

Robert GrayPortland, OR

Riviera is the backbone of my business by me knowing I always have a little something tucked away and that I can stand on my own two feet. Not only are they there to help, but they have become friends and family.

Linda VillanuevaBaltimore, MD
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