Invoice Factoring for Startups and New Businesses
No revenue history, no problem — provided your customers have one.
The reason factoring is available to a company three months old is that the underwriting question is not "will you survive?" but "will your customer pay this invoice?". If you invoice creditworthy businesses for delivered work, you are factorable almost immediately — which makes factoring one of very few funding options genuinely open to a company with no trading history.
What you still need
- Business-to-business invoices. Consumer receivables are generally not factorable.
- Delivered work, not deposits, retainers or future work.
- Creditworthy customers. This is the actual underwriting, and it is the whole assessment.
- A clean UCC position on your receivables — no existing lender or investor holding a security interest in them.
- Basic entity documentation and a business bank account.
Notably absent: your credit score, your revenue history, your profitability, and your runway.
The constraint that catches startups
Customer concentration, and it catches almost all of them. Factors apply concentration limits — typically capping any single customer at somewhere between 20% and 50% of the facility. Early-stage companies almost always have concentrated revenue, frequently a single anchor client.
If one client is 80% of your invoicing, most of your ledger may be ineligible no matter how strong that client's credit is. This is the single most common reason a startup is declined or offered a facility far smaller than expected. Ask about concentration limits before the application, not after.
Compare financing options across 75+ lenders, including accounts receivable financing →Speak with an advisor. Checking options does not affect your credit. We may earn a commission — see the rate card.
The UCC filing and your investors
A factor will file a UCC-1 against your receivables. If you have raised venture debt, taken a convertible with a security interest, or have an existing lender, that filing may conflict — and the conflict has to be resolved by subordination before funding.
Check your existing agreements first. Discovering a competing security interest halfway through onboarding costs weeks, and the conversation with an existing lender is easier before you have committed to a factor than after.
Compare against the alternatives honestly
Factoring is fast and expensive. If you can access revenue-based financing, a bank line, a venture debt facility or founder capital at lower cost, do that first.
Factoring earns its cost in one specific situation: growth constrained precisely by the gap between delivering work and being paid for it, where the cash would immediately fund more billable work. If the money would sit in your account as a buffer, you are paying a premium for comfort.
How to read the blanks on this site
Every populated figure on this site was read from the company's own published pages, with the source and date attached. Where a cell says Not published, the company does not put that term in writing on its site — and in a market where the contract matters more than the headline rate, what a factor declines to publish is often the more useful signal. We never fill a gap with an estimate.
The dilution question
Worth stating plainly, because founders under-weight it: factoring is non-dilutive. A few percent of an invoice is almost always cheaper than equity sold to cover the same gap, and it does not appear as debt on your balance sheet either. For a company with real receivables and no other access to capital, that combination is difficult to beat — which is exactly why the product exists.