Factoring has been used for centuries. It is one of the oldest forms of financing. Until recently, factoring was primarily used in the garment and textile industries. Today, factoring is a $150 billion/year financial product and is widely used by all types of businesses that extend credit to credit worthy commercial customers.

Factors make funding decisions based on the credit worthiness of their customers. Banks make credit decisions based on a company’s financial history, cash flow, and collateral. For this reason, banks tend not to lend to startups, businesses operating for a short period of time, businesses that have had losses (even if the loss was due to startup costs), past problems in the business, and a wide range of ‘red flags’. The factor is more interested in the credit worthiness of your customers and not in any skeletons that may be in the closet. A factor is more interested in what you are doing today, what you can do tomorrow, and less concerned about what happened to you yesterday.

Factoring works well for startups as well as high-growth businesses, including those cyclical in nature. Factoring is also well suited for under-capitalized companies, turnarounds or companies with cash-flow problems. Credit worthy customers is all you need. Examples include:

  • Business hiring staff and need working capital support to meet payroll.
  • Business having a tough time keeping up with payroll tax payments.
  • Light manufacturing company placing continuous orders with a supplier.
  • Service company working for large creditworthy customers.
  • Startup looking for an easy way to finance its business.
  • Business in a steep growth mode with wide fluctuations in receivable balances.
  • Business looking for capital without loss of shareholder equity.

Generally factoring is not a good fit in the following situations:

  • Business looking for up-front capital to start operations.
  • Retail store selling to consumers.
  • Loan situations related to real estate property.
  • Sales agents or people looking for an advance of future commissions.
  • Start-up with a new contract but need up-front money to get started will not qualify until it can produce an invoice. Purchase Order Financing may be helpful in some cases.
  • Cash out of annual contracts.
  • Pro-forma or pre-billing.

Sometimes, companies with recurring cash flow problems can’t afford to wait 30, 60 or even 90 days for invoice payment. They need cash to meet immediate financial demands. Factoring helps provides this cash by funding the purchase of accounts receivable, often within 24 hours after invoices are created. More often, companies are looking for a safe, simple way to fund their company. Factoring provides a continuous and reliable form of funding. This allows a company to better plan their production and purchasing for the next sale, without having to plan around potential wide fluctuations in cash flow waiting on customers to pay.

Rates are based on individual and specific circumstances. Factoring rates depend on the credit worthiness of your customers, your average invoice size, average payment cycle, factoring volume, and other elements. Bridgeport Capital offers a competitive discount rate for your invoices based on your circumstances. On balance, you will find that the services we provide are very competitive, even when comparing our rates to a traditional bank line of credit.

No. Factoring is not a loan. It is the purchase of an asset – your accounts receivable – at a discount by a financial institution called a Factor. A traditional bank loan uses all of your company assets as collateral. Invoice factoring, or accounts receivables factoring, relies on the credit worthiness of your customers, not your balance sheet or history. Banks are heavily regulated, and large finance companies are driven by an assortment of pressures. Time and time again, when the economy hits a downturn, banks and finance companies limit lending. Small businesses that have no track record, a weak balance sheet, a history of financial problems, are in turnaround mode or are otherwise undergoing big changes, often cannot find a lender at any price. In most cases, factoring is the ideal financial solution.


You can factor almost any valid invoice for a service already performed or a product already delivered to a credit worthy business.

We typically advance 80-90% of your receivables immediately, and the balance (less our fees) when invoices are paid. Example: if you have $10,000 in accounts receivable on your books, you could receive up to $9,000 to support working capital needs. The balance due to you of $1,000 (less our fees) will be paid to you when your customer pays the invoice. As your sales increase, so will your receivables, and so will the amount of working capital support available to you on an ongoing basis. Factoring may be the best way of financing sales, because the amount available to fund your cash flow needs grows in direct proportion to sales success.

Bridgeport Capital’s funding decisions are based on the credit worthiness of your customers, not on your credit. We are less concerned about your past. We are more interested in what you are doing today, and what you believe your potential is for tomorrow.


We recognize and respect the relationships and goodwill you have created you’re your customers, and we will treat them with the same degree of integrity and professionalism. Any serious issues will be discussed with you and handled appropriately.

Absolutely not! Factoring is a viable financing option for all businesses. As long as it is handled in a professional manner, your clients will understand you are doing what every business does: Putting in place a well thought out working capital facility to insure your business continues to grow and support your customers. Most of your clients are accustomed to dealing with factors, which is a $150 billion annual business in the U.S. alone. Factoring has been around for several centuries. Most business professionals today are aware that factoring is a common financial tool used successfully by companies of all sizes.

No. You invoice your customers as usual and fax or email a copy of the invoice to us. After verifying the invoice, we will make an immediate cash advance to your company. Then, you or a Bridgeport Capital specialist will follow-up with the customer to ensure prompt, accurate invoice payment.


We can factor your business if you have $50,000 or more in outstanding accounts receivable from credit worthy customers. Some of our clients began factoring with their first sale; others were well-established businesses.

Within 24 hours of receiving your basic company information, we will issue a proposal. If it is accepted by you, we conduct due diligence and complete all documentation. Initial funding typically takes place about one week from the time we receive all necessary documents. After that, funding generally occurs on a recurring basis within 24 hours of your invoice submissions.

No. You decide the invoices you want to submit for factoring that help you successfully manage your financial needs. We provide you with a flexible financial service that allows you to create the cash flow you need.

We provide you with status reports on each invoice we have purchased (e.g., those that have been paid and when, which invoices are still outstanding, the balance in your reserve account, etc.). You can also access daily and weekly reports with full account details. These reports are available on line via our website.

Yes. We are proud of the services we offer, and we are more than happy to provide references.

Yes. That is one of the big advantages of factoring with us, as we typically only take a security interest in your accounts receivable as collateral for our purchase of them. Your machinery, equipment, intellectual property, and real estate generally remain unencumbered and available as collateral for other lenders. If a commercial bank provides you with credit, they usually take a security interest in ALL your assets. This means you generally cannot borrow from any other source, unless the bank subordinates its interest in those assets.

Sometimes yes and sometimes no. You can still factor if your bank has not taken a security interest in your accounts receivable. This is rare, but it does happen. Otherwise, we must work with your bank to arrange for them to subordinate their interest to us, or work out some other acceptable arrangement. If you have an existing loan and would like to determine if you can still factor with Bridgeport Capital, fill out our pre-qualification online application, and a Bridgeport Capital executive will contact you to discuss your options.