B2B Payments

Interstate Capital Focuses On Factoring Speed

Invoice factoring company Interstate Capital is focusing on speed with its latest enhancements.

The firm said this week it is offering an expedited factoring process to accelerate the time it takes for businesses to access capital when they're waiting for their invoices to be paid. The solution provides financing within 48 hours, Interstate said.

The service provides an online application portal. After approval, companies can see their invoices financed within 24 hours of submission, with funds landing directly in a company's bank account. Interstate said invoice financing can be critical to healthy cash flow management, and to ensuring that small businesses don't fall behind on their own payments when waiting for invoices to be settled.

While Interstate Capital highlighted SMBs' need for such a solution, the company also noted that companies of all sizes may benefit from a factoring tool.

Factoring has become a mainstay for verticals like the manufacturing and freight industries, and, amid economic recovery following the recession, in the apparel industry as well. But competition in the industry is growing.

"Factoring is a tough product and hard to manage entirely online," reflected BlueVine founder and CEO Eyal Lifshitz in an interview with Karen Webster last month.

Factoring also struggles with its reputation: According to Lifshitz, the financing product is misunderstood, and can be applied to more scenarios than simply financing unpaid invoices.

Amid the industry competition, Trade Finance Solution (TFS), another SMB factoring firm, recently acquired industry peer Paragon Financial Group. The deal, announced in January, consolidated the U.S. factoring market and occurred about a year after TFS acquired another industry player, Gerber Finance.

Factoring and other forms of alternative small business financing continue to develop in the U.S. as large corporates extend invoice payment terms. A report published by The Hackett Group last week found that the nation's top 1,000 enterprises have improved their working capital performance, but are doing so by delaying supplier invoice payments.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.