Information Technology Invoice Factoring

Accelerate your cash flow. Accelerate your growth.

The technology sector is a fast moving industry — companies innovate and make decisions that grow their business in almost record time. While the IT industry is very broad, it doesn’t matter if the company has to do with hardware, software, consulting, or other professional services, they all need cash flow to take on big projects. We know the pressure of being in a cash crunch and working under tight timelines, as we’re entrepreneurs too, so we’ve been there ourselves!

One of the biggest cost centers in the tech industry is labor. No matter what stage your business is in, you’ll need staff such as software developers to build the next version of a platform, or cybersecurity consultants to ensure you can take on more clients. Unfortunately, payment terms for big clients are often long, and bills like payroll still need to be met. That’s where a solution like invoice factoring for tech companies can help. Tech company factoring gets your outstanding invoices paid ahead of lengthy net terms, so you’ve got the necessary capital on hand to cover expenses like payroll and go after projects that will let you grow your company. 

What Is Information Technology Invoice Factoring?

Information technology invoice factoring is a form of short-term financing when you sell your outstanding invoices in exchange for a payment advance. The factoring company then works with your customer to settle the invoice according to the original payment terms. 

In a nutshell, factoring tech companies give your technology company funds in days so you don’t have to wait months on net terms. You can then put your funds to work hiring employees with specialized skills and investing in materials, applications, and other tools to serve your customers.

Technology Factoring: What Are the Benefits?

Holding receivables on the books for months means your cash flow is stifled, and the working capital needed to grow your company is held up. Invoice factoring for tech companies can help you get outstanding invoices paid faster, but there are so many more additional benefits of factoring you might not have thought about, including:


  • Quick access to capital. You might have hundreds of thousands – or even millions – in outstanding invoices, but they’ll take months to collect. Information technology factoring gets you funding in days. 
  • Flexible funding. Get funding any time you need capital on short notice. With FundThrough, you can fund the invoices you want, when you want, without minimum funding obligations, and no long-term commitment once the invoice is paid. 
  • Easy process. The great thing about IT factoring is that there’s no time-consuming paperwork – you can apply and submit an eligible invoice for funding in minutes. FundThrough uses a combination of AI, automation, and accounting integrations with popular accounting software like QuickBooks that pull eligible invoices into the platform to make the process simple. 
  • Grow your business. Get capital to go after projects that will take your business to the next level, while still meeting your day-to-day expenses.
  • No bank hassles. Banks often don’t work with new businesses, and take months to approve funding – even for something as simple as raising the limit on an established line of credit. Technology factoring gets you funding without the hassle and without delays.

Understanding the Technology Factoring Process

Knowing how the factoring process works will help you decide if it’s the right funding method for you and your business. It will also help you be able to better evaluate different factoring tech companies.

Step-by-step IT factoring

After our simple set up, submit invoices for funding in FundThrough without time-consuming paperwork. Here’s how it works: 

1. Create (or connect) your account. The first step in IT factoring is to create a free account or connect your QuickBooks or OpenInvoice account to FundThrough’s dashboard. Setup takes just a few minutes. After that, provide some basic information about your business to get started.

2. Select which invoice(s) to fund. You can upload into FundThrough’s online portal directly, or pull in eligible invoices from QuickBooks or OpenInvoice. We provide unlimited funding for your business based on the size of your outstanding invoices. Simply choose the invoice(s) you want to fund, and submit them in one click (after initial customer setup).

3. Get funded, then, get back to business. Upon approval, funds are deposited into your business bank account as soon as the next business day. You can then get busy putting your capital to work for growth projects, covering payroll, purchasing equipment, making strategic hires, and more.

What Types of companies Use Information Technology Invoice Factoring?

Accounts receivable factoring for information technology benefits startup tech companies and large corporations. Just a few of the companies that can reap the rewards of IT factoring include:
  • Enterprise software
  • Web developers
  • IT consultants
  • Mobile app developers.
  • Tech hardware producers
  • Software developers
  • Online marketing services
  • Manufacturers
  • Telecommunications companies

IT Factoring: Use Cases for Getting Paid in Days

IT companies might use the funds from factoring to:

  • Pay employees and suppliers
  • Purchase new equipment and supplies
  • Build new products
  • Take on large growth projects
  • Market their companies
  • Build inventory
  • Cover taxes

How Does Information Technology Invoice Factoring Compare With Other Kinds of Business Financing?

Each of these different funding options have pros and cons to consider, so that you can make the best decision for your company.


Costs for a new or growing IT business can be significant. You may need to purchase equipment and inventory, pay employees, and keep up with rent, taxes, and marketing. You may consider taking out a business loan. A business loan provides businesses with a lump-sum payment to help fund business activities. It is a form of debt, and will require you to repay the amount of the loan (plus interest) over an agreed upon period of time.


  • Low interest rates when compared to many other types of funding.
  • Interest can be deductible on your taxes.
  • Loan sizes vary to best meet your needs.
  • On-time repayments can help improve your credit rating.


  • Many small, growing businesses don’t qualify for business loans. On top of that, they often need cash faster than the process would allow. 
  • Most lenders have strict guidelines for loans, and a lengthy review process.
  • You’ll need to have a good credit rating to get low interest rates. Anything else and you may not qualify, and if you do you’ll likely pay a higher interest rate.
  • Rates can fluctuate depending on the market. When you borrow can influence how much interest you’ll pay.
  • You have to pay back the loan, reducing your cash flow – the problem you’re trying to solve.

Lines of Credit

business line of credit (LOC) is a lot like a credit card. You can borrow/withdraw money up to a certain maximum amount determined by your financial institution. You can use the funds to cover day-to-day expenses and pay back your debt. It’s ready for you to draw on it again when needed.


  • You can borrow only what you need as long as you don’t exceed your limit.
  • Making on-time payments can help improve your credit score.
  • Lines of credit can have lower interest rates than other forms of business funding.


  • As with business loans, oftentimes banks won’t give small, growing businesses a line of credit. They often need cash faster than the process would allow, anyway.
  • There will be limits on the maximum amount you can borrow, which might not always be enough to meet your needs.
  • Although you pay-as-you-go, if you miss payments, are late, or move outside the terms of your agreement, you might face high penalties and fees.
  • It’s easy to misuse a line of credit (just like it’s easy to misuse a credit card).
  • If your business fails, you are still responsible for any payments and debt incurred from using your business line of credit.
  • It’s difficult to qualify: You need to have been in business at least two years, and will need to provide bank account information, financial statements, tax returns, and more in order to qualify.

Business Credit Cards

Like all forms of funding, business credit cards must be used wisely or things can go sideways very quickly. Business credit cards work much the same as a personal credit card, however, it is tied to your business and meant for business-related purchases.


  • It’s easier to qualify for a business credit card than for a line of credit or business loan.
  • You have quick access to the cash you need, when you need it.
  • Many business credit cards have reward programs or incentives, like cash back or airline miles.
  • A business credit card can help build credit, which is helpful if you ever need to apply for a bank loan.


  • You may need to provide a personal guarantee to qualify.
  • High interest, costly annual fees, and late charges can add up, especially if funding a large expense.
  • Many business credit cards do not offer purchase protection.
  • Business credit cards come with security risks like fraudulent charges from unauthorized use and stolen credit card numbers.
  • You risk overspending.

Receivables Factoring

Receivables factoring for information technology companies involves selling your outstanding invoices to a factoring company, who then advances you the payment (minus a small fee). The factor works with your customer to collect payment for the invoice according to the original net terms. 


  • You have access to quick capital by getting paid in days.
  • You can get an invoice funded any time, even on short notice.
  • Does not require your business to have a long credit history, making it ideal for start-ups and fast-growing firms.
  • Relies on the creditworthiness of your customers, not your business.
  • Easier to qualify for than most other forms of business funding.
  • Funding can increase with the value of your invoices.
  • No dilution; keep control of your company
  • No debt, since your customer repays the tech factoring company


  • Information technology factoring invoices need to be verified. You might be concerned about a factoring company contacting your customer, but with FundThrough you don’t have to worry, as we understand the importance of treating your customers like our own.
  • Can be complicated to account for in bookkeeping. Some people think that accounting for technology factoring transactions in their bookkeeping software is challenging, but our step-by-step guide makes it easy.

How Do You Choose an Information Technology Factoring Partner?

Choosing an IT factoring partner is a lot like choosing any lender. It pays to do your homework. There are also several questions to ask prior to starting the application process:

Does the factoring company work with information technology companies?

Most factoring companies work with most industries, but not all. Some factors specialize in only a few industries. Experience in your industry will make the factoring company easier to work with as they’ll already have an understanding of how your business works and the unique challenge you face. FundThrough has experience working with IT companies of all kinds to grow their business while also covering ongoing operating expenses — with the track record to prove it.

Will you get dedicated customer service?

At FundThrough, we provide you with a dedicated account manager and a specific customer service contact to work with so you always receive prompt, transparent communication. This level of dedicated customer service can help make getting funded faster and easier. 

What advance rates does the factoring company offer?

Advance rates can range from 60% to 100%, depending on the factoring company and sometimes the industry. 

FundThrough advances 100% of the invoice amount, less a small fee.

What factoring fees does the factoring company charge?

A factoring company should be able to tell you what factoring fees it charges upfront. But some companies may make it difficult to determine the total costs of using their service. FundThrough offers transparent pricing so you know prior to signing an agreement.

FundThrough pricing = 100% advance rates minus a flat fee. One upfront price. No hidden fees.

Does the factoring company have minimums?

A minimum is the amount you must factor every period (month, each quarter, or every year). Some factoring tech companies offer plans that require minimums, while others do not.

FundThrough doesn’t require minimums. Only fund when you need to.

Cash flow is the number one problem for most start-ups and small IT businesses, especially if they’re growing. Invoice factoring companies typically consider several qualifications before offering you an advance.

  • B2B business: You must be a registered business selling goods or services to other businesses.
  • Service completion: Invoice factoring is only available for goods or services that your clients have marked as complete or delivered.
  • Encumbrance-free invoice: Since invoices are the only collateral in a factoring arrangement, encumbrances such as tax liens can make it difficult to qualify for tech company factoring. (But not impossible. FundThrough works with businesses on IRS and CRA tax payment plans all the time. We can even help you with setting up an arrangement!)

See if you qualify now.

Factoring invoices is a sound financial strategy if you:


  • Spend time tracking down slow-paying customers and waiting 30, 60, or 90 days to be paid, which puts a tremendous burden on your business.
  • If you’ve delivered a product or provided a service to another business.
  • If you have slow times, downtimes, or your business is cyclical.
  • You experience times of cash flow crunch.
  • You need access to working capital to grow as an IT company.
  • You can’t qualify for a business loan.
  • Your customers or clients are creditworthy.

Simple. Intuitive. Information Technology Invoice Factoring.

Built For Your Business.

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