Invoice factoring

Part of Business Financing

Invoice factoring turns eligible unpaid customer invoices into earlier cash by selling receivables to a funding provider. It can help when customer payment terms are longer than your payroll or supplier deadlines. Compare the initial advance, held-back reserve, discount charges and collection arrangements together. Factoring is not the same as a conventional term loan.

Compare the 2 listed products below. Open a product for its terms and source links. Missing terms are not confirmed.

eCapital

Invoice Factoring

Receivables-based funding converts unpaid customer invoices into working capital, with online access to manage funds.

Account access: 24/7 online fund management.
Funding basis: Outstanding customer invoices.
Fees and recourse: Not confirmed; request fees, reserve terms and non-payment obligations.

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Liquid Capital

Invoice Factoring

Invoice purchasing provides an advance on unpaid receivables, with the balance released after collection less fees.

Reserve release: Remaining balance after collection, less fees.
Structure: Purchase of outstanding invoices rather than a term loan.
Collection: Provider collects from the customer on the business behalf.

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Costs to compare

Request the discount-fee schedule, reserve deductions, minimum-volume charges and termination costs. The amount advanced is not the same as the full invoice value.

Risks and restrictions

Ask who bears customer non-payment, disputes and credit notes. An invoice sale is not necessarily risk-free: the contract determines recourse and continuing obligations. Consider how provider-led collection may affect customer relationships.

Common questions

Will I receive the full invoice value immediately?

Not necessarily. Liquid Capital describes an advance followed by a balance payment after collection, less applicable fees.

Who collects the invoice?

Liquid Capital describes collecting on your behalf. Confirm customer notification, collection responsibilities and dispute procedures in the chosen agreement.

Sources for this guidance

What to check before choosing invoice factoring

Cost of funding

Compare interest, origination charges, repayment deductions and the total cost.

Cash flow fit

Check repayment timing against your business income and seasonal changes.

Personal exposure

Ask about collateral, personal guarantees and what happens if payments are missed.

Do not treat a factor rate as an annual interest rate. Ask the provider to explain the repayment calculation.

Before you visit a provider

Confirm current fees, rates and eligibility directly with the provider. Product terms can change over time. A listed product is not a recommendation or a promise of approval.

Availability must be confirmed for your province or territory. If product-specific location or eligibility information is missing, it is not confirmed.

For further guidance, visit Financial Consumer Agency of Canada.

This is general information, not personalized advice. Read our editorial policy and affiliate disclosure.