Stop financing your GC's cash flow at your expense. Factor construction and contractor invoices for 80–90% of face value within 48 hours. No debt. No waiting.
Construction is fundamentally a business of delayed payment. A subcontractor might complete electrical rough-in on a commercial project in January, submit their application for payment to the GC on February 1, and — if everything goes smoothly — receive payment sometime in March or April. That is two to three months of performed work sitting as an uncollected receivable on the contractor's books.
During those two or three months, the contractor's obligations do not pause. Payroll continues weekly. Material suppliers expect payment within 30 days. Equipment leases, insurance, fuel, and overhead continue on schedule. The result is a predictable cash gap that has nothing to do with the contractor's profitability or skill — it is structural to how the construction payment chain is organized.
Construction invoice factoring addresses this problem at the source. Rather than borrowing money to cover the gap and repaying it later, contractors using factoring are simply converting an asset they already own — a legitimate, completed invoice — into cash immediately. The factoring company collects from the GC or owner on the original terms. The contractor gets paid in days, not months.
Finish the contracted scope of work and submit your application for payment or invoice to the GC or project owner as normal. The invoice must be for completed, undisputed work.
Upload the invoice and supporting documentation (lien waiver, work completion documentation) through our online portal or by email. First-time submissions include a brief account setup process.
Once the invoice is verified, we advance 80–90% of the face value directly to your business bank account. No waiting on the GC's payment cycle.
Merchant Fund Express contacts the GC or project owner and collects payment on the invoice per the original net terms. The GC pays us directly.
When the GC pays the full invoice, we release the remaining 10–20% to you, minus our factoring fee (2–5% of the invoice value). You keep the rest.
Invoice factoring is used across every tier of the construction payment chain. Any contractor waiting on payment from a creditworthy client is a candidate for factoring:
| Factor | Invoice Factoring | Working Capital Loan |
|---|---|---|
| How it works | Sell your invoices, receive cash now | Borrow against revenue, repay over time |
| Adds debt to balance sheet | No | Yes |
| Collateral required | The invoices themselves | Usually none (unsecured) |
| Best for | Contractors with large unpaid receivables | Bridging general cash flow gaps |
| Cost structure | Fee per invoice (2–5%) | Factor rate on borrowed amount |
| Speed | 24–48 hours per invoice | 24–48 hours after approval |
| Credit score requirement | Based on client creditworthiness | Minimum 500 |
Many contractors use both: invoice factoring to accelerate receivables collection and working capital loans for specific cash needs not tied to outstanding invoices. The two products work well together and are not mutually exclusive.
Construction invoice factoring is a financing arrangement where a construction company or contractor sells its unpaid invoices to a factoring company at a small discount and receives the majority of the invoice value — typically 80–90% — within 24–48 hours rather than waiting 30, 60, or 90 days for the GC or owner to pay.
Most construction factoring arrangements advance 80–90% of the invoice face value immediately. The remaining 10–20%, minus the factoring fee (typically 2–5% of the invoice), is released when the GC or client pays the full invoice.
No. Invoice factoring is not a loan — it is the sale of an asset (your accounts receivable). It does not appear as debt on your balance sheet, does not require collateral beyond the invoices themselves, and does not affect your credit utilization ratio.
We factor invoices for completed work billed to creditworthy commercial clients including general contractors, property developers, municipalities, and commercial property owners. Residential homeowner invoices can also be factored depending on the client's creditworthiness.
Yes. Subcontractors are actually among the most common users of construction invoice factoring because they are most exposed to GC payment delays. Electrical, plumbing, HVAC, drywall, roofing, and specialty trade contractors all commonly use invoice factoring to manage cash flow.
Factoring fees (also called discount rates) typically range from 2–5% of the invoice value, depending on the invoice size, the creditworthiness of the GC or client, and how quickly they pay. Larger invoices with creditworthy obligors typically qualify for lower rates.
Initial setup of a factoring account takes 1–3 business days. Once your account is established, individual invoice advances typically process within 24–48 hours of invoice submission and verification.
With recourse factoring, if the GC or client does not pay the invoice, you are responsible for buying it back. With non-recourse factoring, the factoring company absorbs the loss if the client doesn't pay due to financial insolvency. Non-recourse factoring typically carries slightly higher fees but provides greater protection against client default.
Apply in 10 minutes. Account setup in 1–3 days. Invoice advances in 24–48 hours after that.
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