Quick Answer: Restaurant invoice factoring lets you sell unpaid invoices (receivables) for immediate cash. A factor advances most of the invoice value and collects from your customer. It can help when you have large catering or B2B invoices with 30–90 day payment terms.
When you have large catering orders or corporate accounts with payment terms of 30–90 days, you've done the work but the cash isn't yours yet. Restaurant invoice factoring lets you get paid before your customer pays. Here's how it works and when it may fit.
How Invoice Factoring Works
You sell your receivables (unpaid invoices) to a factor. The factor advances you most of the invoice value—often 70–90%—upfront. The factor collects from your customer. You receive the remainder minus fees when the customer pays. It's not a loan—it's a sale of receivables.
When Factoring Makes Sense for Restaurants
Large catering or B2B invoices with payment terms of 30–90 days. When you need cash before the event or before the client pays. When you can't wait for net-30 or net-60. Compare with restaurant cash advance—factoring is tied to specific invoices; a cash advance is based on your overall revenue. Both can provide fast cash. See restaurant catering deposit funding for more on catering cash flow.
Factoring vs Cash Advance
Factoring requires specific invoices. A cash advance is based on your revenue history. Factoring is often used for B2B or catering revenue. A cash advance can fund any business need. Restaurant funding options include both—compare for your situation.
Frequently Asked Questions
What is restaurant invoice factoring?
You sell your receivables (unpaid invoices) to a factor for immediate cash. The factor collects from your customer. You get most of the invoice value upfront.
When does invoice factoring make sense for restaurants?
When you have large catering or B2B invoices with payment terms of 30–90 days and need cash before the customer pays.
How does invoice factoring differ from a cash advance?
Factoring is tied to specific invoices. A cash advance is based on your overall revenue. Both can provide fast cash—compare options for your situation.