The factor underwrites your customer, not you.
Unlike a loan, factoring underwrites the account debtor, the customer who owes the invoice, rather than you. The factor pulls a commercial-credit report, a Dun and Bradstreet or Paydex file, on that customer, plus an aging of your receivables, and sets the advance and the fee off the customer’s payment history. Your own personal credit is secondary: there is no hard minimum, and owners with poor credit, no credit, or a business under a year old are often eligible, since the factor weighs your customer’s payment history more than your credit. The factor still runs background, tax-lien, and UCC checks and usually asks for a personal guaranty, or a validity guaranty (your written promise the invoices are real and unpaid), and the invoice itself has to be clean, undisputed, assignable, and within terms. One limit follows directly from underwriting the customer: debtor concentration. A single customer is typically kept near or under about 20 percent of your factored volume, and commonly capped somewhere in the 20 to 40 percent range, higher for very strong customers. Concentration caps how much of a given invoice is eligible; it does not automatically disqualify you.
How the money movesAdvance now, reserve later, fee in between.
The money arrives in two pieces. On day one you get the advance, a percentage of the invoice face. The remainder is the reserve, held back until your customer pays; when they do, the factor releases the reserve minus the factoring fee. Worked through: on a $100,000 staffing invoice at a 90 percent advance and a 2 percent fee, you get $90,000 up front, the $10,000 reserve is held, and once your customer pays you receive $8,000 back, the reserve minus the $2,000 fee, for $98,000 total on the $100,000 invoice. The fee comes in two shapes. A flat fee is a single charge per invoice. A tiered fee steps up the longer the invoice goes unpaid, commonly by about half a point every 10 to 15 days, so a slow-paying customer quietly raises your cost even when nothing on the contract changes.
The ancillary layerThe fees that turn 2 percent into 4.
The headline fee is not the whole cost. A layer of ancillary fees sits beside it and, carried alongside a tiered schedule and float days, can turn a headline near 2 percent into a realized cost near 4 percent in an adverse contract. None of these fold into the factoring fee, so ask about each one by name.
Origination or setup
A one-time fee, commonly $150 to $2,000, sometimes quoted as up to 1 percent of the credit line, meaning the facility limit, not the advance. Read the denominator carefully; misread it and the figure is off by roughly tenfold.
ACH and wire
Charged every time money moves: about $0 to $30 per ACH and $15 to $75 per wire. Small on their own, but they recur on every advance and every reserve release.
Monthly minimum
A make-whole fee if your factored volume falls below a set floor, so a slow month can cost you even when you factor little or nothing.
Lockbox
About $50 to $500 a month, up to $1,000 at the high end, for the account your customers pay into.
Early-termination
A flat $250 to $500, or more commonly 1 to 3 percent of the facility or up to six months of minimums, if you leave before the term ends.
Float or clearance days
1 to 3 business days added before a payment counts as received. On a tiered fee schedule those days can push an otherwise on-time invoice into the next, costlier tier.
Decide who carries the customer risk.
Recourse and non-recourse decide who carries a customer who never pays. Recourse, the default and the cheaper structure, means you buy back an unpaid invoice. Non-recourse means the factor absorbs the loss, but read the fine print: it usually covers only your customer’s insolvency during a defined window, not disputes, short-pays, or slow-pays. It costs more, about half a point to a point extra for freight and about half a point to two points for general B2B. Ask exactly what a non-recourse deal covers before you pay the surcharge for it, because a deal that only pays out on formal insolvency is narrower than it sounds.
The questionsEight questions to ask before you sign.
The advance percentage
How much of each invoice you receive up front, and how the reserve is set against it.
The factoring fee, and whether it is flat or tiered
One charge per invoice, or a fee that steps up the longer an invoice goes unpaid, commonly by about half a point every 10 to 15 days.
The reserve, and when it is released
The held-back remainder, and whether it comes back to you on customer payment, minus the fee, or on some other schedule.
Recourse or non-recourse, and what non-recourse actually covers
Whether you buy back an unpaid invoice, and if non-recourse, whether it covers only customer insolvency or also disputes and short-pays.
Every ancillary fee, and the monthly minimum
Origination, ACH and wire, lockbox, float days, and the volume floor. These are what turn a headline fee into the realized cost.
The term and any early-termination fee
How long you are committed, and exactly what it costs to leave before the term is up.
Whether it is notification factoring
Whether your customers receive a notice of assignment, a letter redirecting their payments to the factor. It is about 54 percent of volume, and in that case the factor collects from your customers directly, so ask how the notice is worded and how they handle your accounts, because it becomes their voice to your customer.
Whether the deal is whole-ledger or selective
Whether you must factor every invoice, called whole-ledger, or can choose which ones, called selective or spot. Whole-ledger usually earns a lower fee but locks in your volume and any monthly minimum, and a UCC filing on all your receivables can sit underneath it, so confirm what you are committing to before you sign.
Some answers only arrive with an offer.
A few of these answers cannot exist until a factor reviews your file. Your exact advance percentage, your factoring fee, your reserve, and which of your customers clear underwriting are all priced from your real receivables, your customers’ credit, and your invoice quality, so no honest number exists before that review. The APR-equivalent on the pricing guide is a comparison tool, not a quote, so do not read it as your price. When a question can only be answered with an offer in hand, the next step is to apply and get one. Any offer we bring back goes on a single page, with the advance, the fee, the reserve, and every ancillary charge in plain figures, before you sign, and walking away costs nothing.
Every figure on this page is general US market data as of Jul 2026, not Trident pricing and not an offer. It is here so you can read a factoring quote with clear eyes. Any real offer, and the partner paperwork behind it, governs. This page is education, not legal or financial advice.