When payroll is due weekly, fuel costs are rising, or suppliers demand immediate payment, waiting 30 to 60 days for customer payments is not an option. Factoring promises faster access to working capital—but how fast can you actually get funded?
The answer depends on two factors:
- Whether you are establishing a new factoring relationship
- Whether you are submitting invoices under an existing agreement
The first funding cycle involves onboarding and due diligence. After that, getting funded becomes significantly faster and more predictable.
Let’s break down the timeline.
The Initial Setup Timeline
If you are entering into a new factoring agreement, the process typically takes one to two weeks from application to first funding. In urgent situations, it can move faster. In more complex cases, it may take slightly longer.
Step 1: Application (1–3 Days)
The process begins with submitting basic documentation. Most factoring companies request:
- Company information
- Accounts receivable aging report
- Customer list
- Sample invoices
- Organizational documents
- Bank statements (in some cases)
This step is generally straightforward. The speed depends largely on how quickly you can provide accurate and complete documentation.
Well-prepared applicants often move through this stage in a day or two.
Step 2: Due Diligence and Underwriting (3–7 Days)
This is the most detailed part of the process.
The factoring company will:
- Review your customers’ credit profiles
- Pull commercial credit reports
- Verify invoice authenticity
- Confirm delivery of goods or services
- Perform background checks
- Establish credit limits for each customer
Unlike banks, factoring companies primarily underwrite your customers—not just your business. The stronger your customers’ credit, the smoother this stage tends to be.
If your customers are established companies with clean credit histories, underwriting can move quickly. If there are disputes, concentration issues, or complex billing structures, this stage may require additional time.
Step 3: Contract Review and Signing (1–3 Days)
Once approved, you will receive the factoring agreement for review.
This stage includes:
- Executing legal agreements
- Establishing advance rates and fee structures
- Sending a Notice of Assignment (NOA) to customers
The Notice of Assignment informs your customers that future payments will be directed to the factoring company.
Clear communication at this stage helps prevent confusion and delays.
Step 4: First Funding (Same Day or Within 24–48 Hours After Verification)
Once onboarding is complete and your first invoices are verified, initial funding typically occurs quickly.
In many cases, funds are wired the same day verification is finalized—or within 24 to 48 hours.
For companies facing immediate payroll or supplier deadlines, this first funding cycle can provide significant relief.
Getting Funded: Speed After Setup
After your account is fully established, the process becomes much faster.
Most factoring companies fund approved invoices:
- Within 24 hours
- Same day in many cases
At this stage, speed depends primarily on:
- Documentation accuracy
- Invoice verification procedures
- Customer responsiveness
For established relationships with repeat customers, verification can be streamlined significantly.
Many businesses move from submitting an invoice to receiving funds within a single business day.
What Can Slow Down the Process?
While factoring is known for speed, certain factors can cause delays—especially during initial onboarding.
Common slowdowns include:
Customer Disputes
If a customer disputes invoice details, verification may stall.
Missing or Incomplete Documentation
Incorrect invoices, missing contracts, or inconsistent billing records can delay underwriting.
Complex Contract Structures
Multi-layered vendor agreements, MSP arrangements, or government contracts may require additional review.
International Receivables
Cross-border transactions introduce additional compliance and credit considerations.
Preparation is the most effective way to prevent delays.
How to Speed Up Approval
Businesses can accelerate the funding process by:
- Providing clean, organized accounts receivable reports
- Ensuring invoices match purchase orders and contracts
- Confirming customer contact information
- Alerting customers in advance about the Notice of Assignment
- Addressing outstanding disputes before applying
The more transparent and organized your documentation, the faster underwriting moves.
Comparing Factoring Speed to Traditional Financing
For context, bank loans or lines of credit often require:
- Multi-week underwriting
- Extensive financial documentation
- Committee approvals
- Collateral evaluation
Factoring typically moves faster because approval is tied to receivables and customer credit rather than long-term financial ratios.
For companies operating in industries with weekly payroll cycles—such as staffing, trucking, or manufacturing—speed can be more valuable than rate alone.
Realistic Expectations
Initial approval and onboarding generally take about one to two weeks under normal circumstances.
In urgent situations with strong documentation, it can move faster.
After setup, getting funded becomes rapid and routine—often within 24 hours of invoice submission.
Final Thoughts
Invoice factoring is not instantaneous on day one—but it is significantly faster than most traditional financing options.
The initial onboarding process requires due diligence and documentation. Once complete, funding becomes fast, predictable, and aligned with your invoicing cycle.
For businesses facing immediate payroll, fuel, inventory, or vendor obligations, factoring offers one of the quickest paths to consistent working capital.
Speed is not just about how fast you can get funded the first time. It is about how quickly and reliably you can access capital every time you generate revenue.
