Invoice Factoring: Does Bad Credit Matter?

Phil Cohen

Your Business Can Qualify for Invoice Factoring…Even with Bad Credit

How Can Your Business Get Funding with Bad Credit?

If you’re considering invoice factoring to help your business’s cash flow but are afraid of being turned down because of a poor credit score, your fears are over! Because your customers are the ones paying the invoice factoring companies, factors look at their credit-worthiness, not your personal or company credit history.  

What Does This Mean for Your Business?

If your business is a corporate entity or an LLC, its credit score is separate from yours. Therefore, if your credit score is really bad, it won’t affect whether your business qualifies for factoring.

Using Invoice Factoring to Grow Your Business

As your business grows and expands, so does the need for working capital. By factoring your outstanding invoices, you are given immediate cash flow without collecting debt that traditionally comes with bank loans.  You can utilize the funds to meet payroll, maintenance, inventory and other unforeseen expenses.  As long as you have invoices to factor, funding is available!

Benefits of Invoice Factoring vs. Traditional Bank Loans

  • Immediate cash flow without creating debt
  • Approval based on the credit of your client, NOT you
  • Quick approval time
  • Available for start-up companies

What is Best for Your Business?

Factoring invoices is a great financing option for a startup business or other company that hasn’t had enough opportunity to establish a good credit score. If your customers typically pay their bills in a timely manner, a factoring company is more likely to take you on as a client.

So there you have it – your credit score won’t affect your ability to factor. Invoice factoring gives you up to 90 percent of the value of your invoices upfront. Once the factoring company receives payment for the invoice(s), the remaining balance is forwarded to you, minus a small factoring fee.

man paying someone with $20 bills
Hands giving money isolated on white background

If your business is sitting on open invoices and needs to improve working capital, invoice factoring is the answer – even if your credit rating is less than stellar.

We partner with a nationwide network of factoring companies that specialize in many industries. Our invoice factoring specialists will identify your company’s needs and goals to connect you with the perfect account manager.

For more information, call now or fill out a form below for your free factoring quote.

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Phil Cohen

Phil is the owner of PRN Funding and sister company Factor Finders. He has been an authority in the factoring industry for over 20 years, serving on the board of directors for several factoring associations.


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