Invoice Factoring FAQ

Straight answers about how invoice factoring works at American Commercial Capital — what it costs, who it fits, what we require, and where it stops making sense. If your question isn’t here, call Roy Brooks at 713-227-3863.

What is invoice factoring?

Invoice factoring is the sale of your unpaid business-to-business invoices at a discount. You deliver the work, send us the invoice, and we advance most of its value right away instead of you waiting 30 or 60 days to get paid. We collect from your customer, then pay you the balance less our fee.

Is invoice factoring a loan?

No. We buy your receivables — we don’t lend against them. Nothing lands on your balance sheet as debt, there’s no interest rate, and there’s no repayment schedule. The money comes from your customer paying an invoice they already owe you. That difference matters for your books and for any bank financing you pursue later.

How does American Commercial Capital make money?

We collect a fee when your customer pays the invoice. That’s it. We’re not charging interest on a loan or billing you monthly for access to a line of credit. Remember: we buy, we don’t lend.

If a bank won’t lend to me, how can you fund my business?

A bank lends based on your company’s credit and your personal net worth. If your business is young or thin on assets, that’s a hard conversation. We look at your customers’ credit instead, because they’re the ones who owe the money. If you sell to creditworthy businesses, we can buy those receivables regardless of how new your company is.

How much does invoice factoring cost?

Our fees start at 2%. Where you land depends on your monthly volume, your average invoice size, your customers’ credit quality, and how long your invoices take to pay. Higher volume and faster-paying customers mean a lower rate. We quote your actual fee schedule before you sign anything.

How much of the invoice do I get up front?

Typically 70% to 80% of the invoice face amount, usually within 24 hours of approval. Where you land inside that range depends on your customers’ credit and your terms of sale. A small number of accounts qualify for 85%, but that’s the exception rather than something to plan around.

Are there application or setup fees?

No application fee, no processing fee, no due-diligence fee. We don’t charge you to look at your business or to set up your account. The factoring fee on collected invoices is the only thing you’ll ever see from us.

When do I get the rest of the money?

When your customer pays the invoice, we release the reserve — the remaining balance, less our fee. Reserves are paid weekly. You also get daily reporting on cash received and a weekly accounts receivable aging, so you always know exactly where every invoice stands.

Is there a minimum amount I have to factor?

We work with businesses factoring at least $25,000 a month. Below that the economics don’t work well for either of us, and you’re likely better served elsewhere. If you’re close to that number and growing toward it, call anyway — we’d rather have the conversation than turn you away over a rounding error.

Is there a maximum?

No maximum. If your volume grows, the facility grows with it. There’s no ceiling to renegotiate and no point at which you outgrow the arrangement. Your available funding is tied to your receivables, so it scales as you sell more.

What industries do you work with?

Staffing agencies, machine shops, manufacturers, IT and computer consulting firms, trucking companies, construction subcontractors, oilfield service providers, and accounting and professional services firms. The common thread isn’t the industry — it’s that you sell to other businesses on terms and then wait to get paid.

Who is factoring not right for?

Factoring isn’t right for you if you need a multi-million dollar facility, want a self-service technology platform, sell to consumers rather than businesses, need true non-recourse coverage, or already qualify for a bank line of credit. In any of those cases we’d rather tell you now than take an application.

Whose credit matters — mine or my customers’?

Your customers’. Our decision rests on whether the businesses that owe you money are good for it, not on your personal credit score or your company’s balance sheet. We do review ownership as part of standard onboarding, but a thin credit file on your side doesn’t disqualify you.

How do I submit invoices?

Email your invoice and supporting documents to credit@amcomcap.com. There’s no portal to learn and no software to install. If you’d rather start a conversation before sending anything, use our contact form or call 713-227-3863.

What do I need to apply?

The application itself carries the checklist, so you won’t have to guess. It covers a completed application, a financial statement, your articles of incorporation or partnership agreement or DBA filing, accounts payable and accounts receivable agings, a customer list, and a personal financial statement, résumé, and driver’s license for each owner.

How long does it take to get set up?

About one week from the time we receive a properly completed application. “Properly completed” is the part that controls the clock — missing documents are the single most common reason setup drags on. Once your account is live, funding runs on a 24-hour cycle.

How fast do I get funded on each invoice after that?

Once your account is live and your customer is approved, we advance up to 80% within 24 hours of approving the invoice. Submit a batch one day and the money is typically in your operating account the next business morning.

How do you collect from my customers?

Your customers send payment to our lockbox instead of to you. We handle posting and follow-up. You keep the customer relationship — we’re not a collection agency and we don’t treat your customers like debtors. Most of the time their bookkeeper updates an address and nobody else notices.

What is a Notice of Assignment, and what will my customer think?

It’s a one-page letter telling your customer to send payments to a new address. It goes to accounts payable, it carries your signature alongside ours, and checks still show your company’s name. There’s nothing in it about your finances or why you called us.

Do you file a UCC-1?

Yes. A UCC-1 is a public filing that records our interest in the receivables we’re buying. Every factor files one — it’s standard, and it’s what keeps another lender from claiming the same invoices. Your customer never sees it.

Do I have to factor all my invoices?

You pick the customers, not the individual invoices. If you want to factor a slow-paying national account and keep two local customers who pay you in ten days, that’s a perfectly normal arrangement. But once a customer is in the facility, their invoices run through us.

Am I locked into a contract?

No. Our agreement has no term length — no one-year or two-year commitment and nothing that auto-renews. Plenty of factors ask you to sign for a year or two with a renewal clause that triggers unless you cancel inside a narrow window. We don’t do that.

Is there a monthly minimum?

No. There’s no contractual monthly minimum, so a slow month never triggers a penalty or a shortfall fee. This is different from the $25,000 in monthly volume we look for when deciding whether factoring makes sense for your business in the first place — that’s a fit question, not a contract term.

Is there a termination fee or notice period?

Nothing. No termination fee, no notice period, no written-notice window to miss. Since the agreement has no length, there’s no “early” for you to leave. If factoring stops making sense for your business, you stop.

What happens if my customer never pays?

If your customer goes bankrupt within 75 days of our purchasing the invoice, we absorb the loss on what we advanced you. After 75 days, or if your customer withholds payment because of a dispute with you, you repurchase the invoice. That’s what recourse factoring means, stated plainly.

Do I have to sign a personal guarantee?

Yes, we require a personal guarantee. Its main purpose is fraud — invoices for work that was never performed, or payments diverted to another account. It is not there to make you personally liable when a creditworthy customer simply goes under. We’d rather be direct about that distinction than let you discover it later.

What if my receivables are already pledged to a bank?

Often workable. If a bank or another lender already holds a lien on your receivables, we can frequently make arrangements with the first lender so factoring can proceed. Raise it on day one rather than in week three — it’s far easier to solve early.

How do I know American Commercial Capital is legitimate?

We’ve been factoring Houston receivables since 2003, and Roy Brooks has worked in accounts receivable finance since 1993. We’re a member of the International Factoring Association and a BBB Accredited Business with an A+ rating. Call us and ask for references from real businesses you might know.