In the world of alternative financing, it is crucial to understand the potential for higher commissions in different transactions. In this article, we will explore and compare the commission structures of invoice factoring and revenue-based financing (RBF) deals. Examining the factors that influence broker commissions in both options can assist brokers in making informed decisions that can maximize their earnings. 

Understanding Broker Commissions 

Broker commissions are an integral part of facilitating transactions in invoice factoring and revenue-based financing. Brokers serve as intermediaries, connecting businesses in need of financing with suitable lenders or factoring companies. In return for their services and expertise, brokers receive compensation or fees. 

Commissions in Invoice Factoring 

In invoice factoring, broker commissions are typically structured as a percentage of the total value of factored invoices. The specific percentage can vary based on factors such as transaction volume, the creditworthiness of debtors, and the duration of the factoring relationship. Brokers in invoice factoring may receive commissions based on a percentage of the factored invoice value. The commission rates can vary, typically ranging from 10% to 15% of the profits, depending on factors such as the industry, client relationship, and the size and quality of the invoices being factored. Consequently, brokers may have the opportunity to earn higher compensation amounts in absolute terms, especially for larger invoices. 

Commissions in Revenue-Based Financing 

Similarly, broker commissions are a part of the financing arrangement in the realm of revenue-based financing. These commissions are usually calculated as a percentage of the cash advance provided to the merchant. Brokers involved in RBF may earn commissions based on a percentage of the total funding amount provided to the business. The commission rates for this financing can vary significantly, but they often range from 2% to 10% of the funding amount, depending on factors such as the risk profile of the business, the terms of the advance, and the broker’s negotiation skills. 

Comparing Broker Commissions between Invoice Factoring and Revenue-Based Financing 

Broker commissions in the realm of alternative financing can vary depending on several factors. The commission structure is influenced by market dynamics, competition, perceived risk, and the complexity of the financing deal. However, one crucial aspect that brokers must consider when assessing their compensation potential is transaction volume. 

Invoice factoring stands out in terms of transaction volume, as it typically involves larger deals compared to revenue-based financing. This means that brokers involved in invoice factoring have the opportunity to earn more substantial commissions. The sheer size of factored invoices can significantly impact a broker’s compensation, offering the potential for significant earnings. Moreover, invoice factoring carries less risk compared to other financing options since there is no loan repayment involved, further enhancing its appeal to brokers. 

On the other hand, revenue-based financing tends to involve smaller funding amounts when compared to invoice factoring. Consequently, the commission potential for brokers in revenue-based financing may be relatively lower in absolute terms. Ultimately, brokers should carefully assess their individual circumstances, market dynamics, and client preferences to determine the most suitable area of focus for maximizing their commission potential. By making strategic choices based on market conditions and their own unique circumstances, brokers can position themselves for success in the dynamic world of alternative financing. 

Other Considerations 

While maximizing compensation is essential, it is crucial for brokers to consider other factors that can impact their earnings. These factors include additional fees and charges associated with invoice factoring and revenue-based financing. Such as application fees or processing fees. It is essential for brokers to seek transparent and detailed information about all potential fees. Overall, this will accurately assess their earnings. 

Manufacturing companies may need to improve their cash flow to ensure smooth operations and cover day-to-day expenses such as payroll, raw materials, and other operational costs. Insufficient cash flow can hinder their ability to meet these obligations, potentially disrupting production and affecting their ability to fulfill customer orders or invest in growth opportunities. 

Invoice Factoring for Manufacturing Companies 

Invoice factoring, also known as accounts receivable factoring, is a financing solution that can be beneficial for manufacturers. It involves selling your outstanding invoices to a third-party financial company, known as a factoring company, at a discounted rate in exchange for immediate cash flow. The factoring company then collects the payment from your customers directly. 

For manufacturers, invoice factoring can provide several advantages: 

1. Improved Cash Flow: Manufacturers often face cash flow challenges due to long payment cycles from customers. Invoice factoring allows you to receive cash upfront for your outstanding invoices, providing you with immediate working capital to cover operational expenses, pay suppliers, invest in new equipment, or fund business growth. 

2. Faster Access to Funds: Unlike traditional bank loans, which can involve lengthy approval processes, invoice factoring typically provides quick access to funds. This can be especially beneficial for manufacturers who need to fulfill large orders or invest in inventory to meet customer demands. 

3. Flexibility: Invoice factoring is a flexible financing option as it is based on your sales volume rather than your creditworthiness. This can be helpful for manufacturers with less-than-perfect credit scores or limited credit history. 

4. Outsourced Collections: When you factor your invoices, the responsibility for collecting payment from customers is transferred to the factoring company. This can free up your time and resources, allowing you to focus on core manufacturing operations. 

5. Increased Sales Opportunities: With improved cash flow from invoice factoring, manufacturers can take advantage of new sales opportunities, negotiate better payment terms with suppliers, or offer attractive discounts to customers for early payment. 

The Factoring Process for Manufacturers 

The invoice factoring process for manufacturing companies typically involves several steps. First, the manufacturing company applies for invoice factoring and provides information about their business and outstanding invoices. The factoring company conducts due diligence and, if approved, the manufacturing company and the factoring company enter into a factoring agreement.  

Next, the factoring company verifies the invoices and notifies the customers of the manufacturing company about the assignment to the factoring company. Upon verification, the factoring company advances a percentage of the invoice value to the manufacturing company, while holding the remaining percentage as a reserve.  

Then, the factoring company assumes the responsibility of collecting payment from the customers, who pay them directly. Once payment is collected, the factoring company releases the reserve amount, minus its fees, to the manufacturing company. This factoring arrangement continues as long as eligible invoices are submitted.  

The Factoring Process with CapFlow Funding Group 

CapFlow Funding Group works closely with manufacturing companies to understand their unique needs and provides personalized factoring solutions to support their cash flow management. CapFlow Funding Group offers flexible factoring solutions based on sales volume, not creditworthiness, making it accessible to manufacturers with varying credit profiles. Furthermore, they provide professional collections services, freeing up time and resources for manufacturing companies. To sign up for factoring services, businesses can directly apply online 

International Factoring Association (IFA) Conference 

The International Factoring Association (IFA) Conference is a premier event for the factoring and receivables finance industry, bringing together professionals from around the country to network, learn, and explore new opportunities. The upcoming IFA Conference on May 10, 2023, to May 12, 2023, promises to be a game-changer for businesses looking to unlock their cash flow and accelerate their growth, with the chance to meet specialists from CapFlow Funding Group, a leading provider of factoring services.
The IFA Conference is a dynamic platform that offers a unique opportunity for professionals in the factoring industry to connect with industry experts, stay up to date with the latest trends and best practices, and explore new business prospects. With a diverse range of attendees, including factoring companies, asset-based lenders, service providers, and industry professionals, the IFA Conference provides a vibrant and collaborative environment for learning and networking.

IFA Conference Agenda

The IFA Annual Conference is one of the IFA’s flagship events, featuring a packed agenda filled with educational sessions, networking opportunities, and industry insights. Here’s the agenda for the IFA Annual Conference, based on the information available on the IFA website (

Day One: Wednesday, May 10th 

6:30 am – 2:30 pm: Networking Golf Tournament. Location: Bayou Oaks Golf Course, City Park.
8:00 am – 4:00 pm: Factoring Essentials Training Course Session.
11:00 am – 3:00 pm: Networking Opportunity: New Orleans Food & History Tour. Location: French Quarter.
1:00 pm – 4:00 pm: Idea Exchange. This will consist of an informal roundtable for attendees to discuss ideas, trends, and issues in the factoring industry. Attendees may come and go to the idea exchange as they please.
4:00 pm – 5:30 pm: Chapters Reception for Chapter Members in the Northeast, Midwest, Rockies, Texas, Southern California, and Canada.
4:00 pm – 5:30 pm: NEXGEN Reception.
5:30 pm – 7:30 pm: Networking Opportunity: Welcome Reception.

Day Two: Thursday, May 11th 

8:30 am – 9:30 am: IFA / AFA Update
9:30 am – 10:30 am: The New Abnormal: How Global Trends are Affecting Your Business featuring keynote speaker Rich Karlgaard.
11:00 am – 12:30 pm: Thursday Morning Breakout Sessions
Breakout Session #1 — Current Topics in Transportation Factoring
Session #2 — Unusual Events in Factoring to be on the Look-Out
Session #3 — Factoring 101
Last Session – The Do’s & Don’ts of Construction Factoring
3:30 pm – 4:30 pm: Thursday Afternoon Breakout Sessions
Breakout Session #1 — Speed Networking
Session #2 — Roundtable for Senior Executives
Session #3 — NEXGEN panel
Last Session  – Inventory Financing
Last Session – The Art of Finding the Appropriate Lender
5:00 pm – 6:30 pm: Roof Top Happy Hour
9:00 pm – 11:00 pm: Tax Guard After Party

Day Three: Friday, May 12th 

9:00 am – 9:30 am: AFA Congressional Viewpoint
9:30 am – 10:30 am: What the Economy Can Do for Factors with keynote speaker Peter Ricchiuti.
11:00 am – 12:30 pm: Friday Morning Breakout Sessions
Breakout Session #1 – Reports from the courts
Session #2 – Canadian Factoring Landscape
Session #3 – Roundtable for Small Factors
2:00 – 3:00 pm: Friday Afternoon Breakout Sessions (Group A)
Breakout Session #1 – Effective Growth Strategies (Part 1)
Session #2 – Legal Panel
Session #3 – ERC Workshop for Factors
Last Session  – Fraud/Risk Management Panel
3:30 pm – 4:30 pm: Friday Afternoon Breakout Sessions (Group B)
Breakout Session #1 – Effective Growth Strategies for Factors (Part 2)
Session #2 – Commercial Finance Disclosures
Session #3 – Operations Roundtable
Last Session  – International Updates

Meet CapFlow Funding at IFA!

At the upcoming IFA Conference, CapFlow Funding Group will be a key presence, showcasing its innovative factoring solutions that have been transforming the way businesses finance their operations. As a leading provider of factoring services, CapFlow Funding Group offers a range of flexible financing options that can help businesses unlock their cash flow and fuel their growth.
Meeting CapFlow Funding Group specialists at the IFA Conference can be a game-changer for businesses looking for reliable and efficient financing solutions. The CapFlow Funding Group team brings a wealth of experience and expertise in the factoring industry, and they are known for their personalized approach to understanding and addressing the unique financing needs of businesses of all sizes. Attendees may schedule a one-on-one meeting with one of our team members at:

Products and Services Offered by CapFlow

CapFlow Funding Group’s factoring solutions are designed to be flexible, scalable, and tailored to the specific needs of each business. They offer factoring services for various industries, including manufacturing, distribution, staffing, and more. With their expertise, CapFlow Funding Group can provide businesses with the financial flexibility they need to navigate through challenges, seize opportunities, and unleash their full potential.
In addition to their factoring services, CapFlow Funding Group also provides value-added services, such as credit checks, accounts receivable management, and invoice processing, to help businesses streamline their operations and improve their cash flow management.
The IFA Conference provides an excellent opportunity to meet CapFlow Funding Group specialists and learn more about how their factoring solutions can benefit your business. Their team is known for their professionalism, responsiveness, and commitment to helping businesses succeed. By partnering with CapFlow Funding Group, businesses can access a reliable and efficient source of working capital, gain financial flexibility, and unlock their business potential.

The Roles of An Account Manager During the Factoring Process 

An account manager plays a pivotal role in keeping clients informed and involved in the invoice factoring process through effective communication. Here are some ways account managers achieve this: 

Regular Updates

Account managers may provide regular updates to their clients regarding the status of their factored invoices. This includes informing clients about the progress of their invoices, any payments received, and any relevant changes in the factoring process. Timely updates help clients stay informed and have a clear understanding of the status of their invoices. 

Proactive Communication

Account managers are proactive in reaching out to clients and keeping them involved in the factoring process. This includes initiating communication to provide updates, addressing any questions or concerns, and discussing any potential issues that may arise.  

Accessibility and Responsiveness

Account managers can be easily accessible to their clients and responsive to their inquiries. Promptly responding to client inquiries, whether through phone, email, or other communication channels, shows that the account manager values the client’s time and concerns. It keeps clients involved and engaged in the factoring process. 

Customized Communication

Account managers tend to tailor their communication style and frequency to match the preferences of their clients. Some clients may prefer regular email updates, while others may prefer phone calls or in-person meetings.  

Clear and Jargon-Free Communication

Account managers communicate in a clear and concise manner. Using simple and understandable language helps clients grasp the details of the factoring process and stay informed without confusion.  

Education and Guidance

Account managers may also provide education and guidance to clients about the invoice factoring process. This includes explaining the steps involved, answering questions, and addressing any concerns clients may have. Educating clients empowers them to make informed decisions and be actively involved in the factoring process. 

Why is Communication Important in Invoice Factoring? 

Open communication is a vital component of the invoice factoring process. Fostering transparency and accuracy in the exchange of information among all parties involved. From the business owner seeking factoring services to the invoice factoring company, the account managers, and the debtor who will eventually pay the invoice, clear and open communication ensures that everyone is on the same page, leading to smooth and efficient transactions. Whether it’s discussing invoice details, addressing concerns, or resolving discrepancies, open communication builds trust, minimizes misunderstandings, and enables a successful invoice factoring experience for all parties.  

Account Managers at CapFlow Funding Group 

Account managers at CapFlow Funding Group play a crucial role in maintaining open communication and keeping clients informed and involved throughout the invoice factoring process. With their expertise and dedication, CapFlow Funding Group’s account managers ensure that clients are kept up to date on their accounts. Account managers at CapFlow Funding Group are known for their accessibility, responsiveness, and customized communication, adapting to clients’ preferences to ensure effective communication. Clients can rely on CapFlow Funding Group’s account managers for exceptional customer service. Along with a high level of involvement, resulting in a seamless and successful invoice factoring experience. 

Disclosure Regulations

Disclosure regulations will now govern how businesses communicate with their clients and investors. These regulations are designed to ensure that companies are transparent about the terms of a deal. Failure to comply with disclosure regulations can result in legal action, fines, and damage to a company’s reputation.

State Disclosure Requirements

New regulations in the revenue-based financing industry in states such as California, Virginia, and Utah have already started to become implemented. More states, including New York, are activating new disclosure regulations for lenders and ISO partners. At CapFlow Funding Group, we have a dedicated team of professionals who are responsible for monitoring specific state regulatory changes. Along with ensuring that the company’s practices are compliant. Additionally, this team works closely with CapFlow Funding Group’s legal counsel. We ensure that we make all necessary disclosures to our clients and investors.

California Disclosure Requirements for Lenders and ISO Partners

In California, lenders, and independent sales organization (ISO) partners are subject to several disclosure requirements under state law. The following are some of the key disclosure requirements:

Truth-in-Lending Act (TILA):

Under the TILA, lenders are required to disclose the terms and conditions of a transaction. Including the annual percentage rate (APR), finance charges, and total amount financed. These disclosures must be made in a clear and conspicuous manner before the borrower is obligated to pay any fees or sign the agreement.

California Financing Law (CFL):

The CFL requires lenders to obtain a license from the California Department of Financial Protection and Innovation (DFPI) and to disclose certain information to borrowers, including the rates, fees, and charges associated with the transaction.

Unruh Civil Rights Act:

This law prohibits discrimination based on various protected characteristics, including race, gender, and sexual orientation. Lenders and ISO partners must ensure that their loan products and services do not discriminate against borrowers based on these protected characteristics.


Virginia Disclosure Regulations

Virginia has now become the second state to require registration and financing disclosure. Sales-based financing brokers and providers must register with the Virginia State Corporation Commission annually. Providers must disclosure specific funding terms including the amount of financing, any charges/fees, the estimated number of payments, information related to prepayments, total payment amount, and the total repayment amount. Unlike California, Virginia does not require disclosure of an annual percentage rate. This Act applies to contracts in Virginia that are entered into in or after July 1, 2022.


Disclosure Act Signed in Utah

Starting on January 1, 2023, commercial financing providers in Utah are required to register with the Utah Department of Financial Institutions and to provide financial disclosures. This includes providers of commercial loans, commercial open-end credit plans, and any revenue-based financing transactions. Disclosure requirements in Utah are now as follows:


Utah law requires commercial finance lenders and brokers to obtain a license from the Utah Department of Financial Institutions to conduct business in the state. The licensing process typically involves providing information about the business, its owners and officers, and its financial condition.

Disclosure requirements:

Commercial financing providers in Utah must provide certain disclosures to their customers.

Debt collection regulations:

Utah has several regulations that govern the collection of debts. For example, debt collectors must provide certain disclosures to consumers when attempting to collect a debt. They are prohibited from engaging in harassing or deceptive practices.

Licensing and disclosure requirements for securities-based loans:

If a commercial financing provider is offering loans secured by securities in Utah, they may be subject to additional licensing and disclosure requirements under state and federal securities laws.


These are just a few examples of the compliance and disclosure requirements that commercial financing providers may need to be aware of when operating in Utah. Therefore, if you are a commercial financing provider or are considering becoming one, it is important to consult with a compliance officer who is familiar with the relevant laws and regulations.


Our team of professionals at CapFlow work together to monitor state regulations to make sure we are complying with any changes. 

In what way does CapFlow Funding Group remain compliant with disclosure regulations?

One way that CapFlow Funding Group stay ahead of disclosure regulations is by providing clear and concise information about their financing solutions. They provide detailed information about the costs associated with their services and the terms and conditions of their financing agreements. This ensures that their clients are fully informed about the risks and benefits of working with CapFlow Funding Group.

Another way that CapFlow Funding Group takes lead of disclosure regulations is by regularly updating their disclosures to reflect changes in the regulatory environment. They take a proactive approach to compliance, rather than waiting for regulators to force them to make changes. Altogether, we ensure to always try to protect and inform our clients.

Become a CapFlow Referral Partner

CapFlow Funding Group’s commitment to transparency and compliance makes them an ideal partner for businesses looking for financing solutions. They offer a range of financing options that can help businesses meet their cash flow needs. Furthermore, their dedication to compliance seeks to provide protection for their clients.

In summary, we are up to date with all regulations related to financing. This means that you can trust that your funding solutions are compliant and your business is being protected. Fund your files with CapFlow Funding Group and rest assured that you are working with a company that values transparency, compliance, and success. With this in mind, if you’re interested in becoming a referral partner with CapFlow Funding Group, contact us directly.

What is import-export factoring? 

Invoice factoring has become one of the alternative financing options that businesses of all scales turn to for additional funding. May it be for an investment or budget augmentation, invoice factoring is a good option to raise any funds needed.  

Import and export companies likewise turn to invoice factoring. In this article, we will learn more about import-export factoring, how it benefits these companies, how it works, and the process of application. Let us dive right in. 


Benefits invoice factoring brings your import-export company 

Import-export companies are generally large companies with transactions from all over the world. Given its magnitude, it is bound to need more funds for business expansions and unexpected finances to keep the company going. Here are the benefits of invoice factoring to import-export companies.

Import factoring 101 

Import factoring offers to fund businesses situated abroad intending to do business in your local area. Others find this kind of funding risky, but as the adage goes: high risk equals high rewards. Import factoring generally begins on a higher beginning mark, from $200,000 to $300,000. By resorting to importing factoring, these companies can have additional capital without incurring any debt, and therefore, removing the need to open a line of credit with banks.  

Export factoring 101 

Export factoring helps to fund export companies without the need for any security instrument or collateral other than the outstanding invoices that the company has. It gives wide elbow room for working capital improvement and reduces the risk of bad debts. This way, you gain access to additional financing for the business and at the same time, take advantage of supplier discounts available. 


How does import-export factoring work? 

The process of import-export factoring involves advancing the cost of outstanding or unpaid invoices of import and export companies. The companies turn over their unpaid invoices to factoring companies. In turn, these companies release the invoice amount minus a small portion of the processing fee. The factoring company now assumes the businesses’ role as the creditor of the customers whose invoices were sold.

They will now be the ones to collect the outstanding amounts for the businesses’ customers. In this funding scheme, import-export companies would not need to wait long for the release of funds. Unlike the lengthier process that traditional banking institutions take. The funds could then be used to support the needs of the company – from payroll payments to operation and other overhead expenses.  


What is the process of applying for import-export factoring services? 

Different factoring companies have their own process when it comes to import-export factoring applications. Briefly, here is how it works: 

1. The import-export company should have a reliable and established international client, with good credit history. 

2. The business and the customer should iron out the details of the transaction. Once the details are threshed out, the company then issues an invoice for the transaction. 

3. The company now fulfills its end of the transaction by shipping the goods and making sure that all the necessary paper works were taken care of. 

4. The company now goes to the factoring company with the invoice together with the other documentation needed (insurance premium receipt, bill of lading, etc.). These documents will now be verified, and the customer’s credit history will now be checked. Since we are talking about international transactions here, it will take more time than usual for local factoring transactions; however, the turnaround time is still quick. 

5. Once the approval comes through, the company can expect the release of the funds within 24 to 48 hours. 

The process may vary slightly, depending upon the protocol of the factoring company. This is but an overview of what you can expect from your application.  Invoice factoring alongside other alternative financing schemes is here to be maximized. Know your options and explore more to get the best for your business.  

What is alternative financing for small-medium sized businesses? 

With their stringent requirements and high-interest rates, small to medium-sized businesses are having a hard time securing a loan from traditional banks. Good thing that there are alternative financing options that businesses now can avail of to get the funding they needed.  

What, then, is alternative financing? Alternative financing means obtaining funding from non-traditional funding or non-bank institutions. It has a different process of approving credit or funding, and the terms and conditions are different than those of a traditional bank. It caters to businesses of all magnitudes but small to medium-sized businesses could leverage the advantages that alternative financing brings.  


Common misconceptions of alternative financing 

While alternative financing has been around for quite some time already, there are still some misconceptions about it due to a lack of exposure to the products. Let us discuss here to dispel these misconceptions. 

You need high margins to receive alternative financing 

Small to medium-sized businesses are wary to try alternative financing because of the myth that they need to have high margins to be able to have access to these kinds of financing. This is definitely not the case. An alternative lender caters to businesses of all sizes, including small and medium-sized enterprises. Others even prefer small businesses as clients. Don’t let your current business margin faze you! 

It is harder to qualify for alternative financing over traditional bank loans 

This myth is the one that stops small to medium-sized businesses in their tracks. But the truth is, alternative financing employs a more streamlined process. While traditional banks would require good credit standing, some alternative financing would not even look at credit scores in screening your business. Some would only require a list of your current customers, or even expected revenue streams. Seeing as these requirements are not difficult to provide, it’s easy to say that small to medium-sized businesses could opt for alternative financing easily. 

Alternative lending is unregulated 

Traditional banks usually have regulators that oversee their business. Seeing as these alternative financiers are not banking institutions, it’s easy to understand why many would think that they are unregulated. However, this is far from the truth. Transactions involving alternative financing involve contract and commercial laws and require adherence to federal and state laws regarding financial transaction disclosures and other regulatory issuance.  

Borrowing from an alternative lender will hurt your credit score 

Credit scores pertain to your ability to meet your obligations to your creditors. A good credit score means that you were able to pay your dues on time and maintain a good record with your banks. Credit score entails your ability to pay your debts; alternative financing on the other hand is revenue-based financing, without the business incurring debts. Since there are no debts involved, transactions involving an alternative lender would not in any manner affect your credit score. 


Why alternative financing options are needed by businesses 

These alternative financing options fill the gap that traditional banks leave: they provide the much-needed funding for small to medium-sized businesses that are not qualified to avail loans from traditional banks, or even if qualified, are unable to do so due to a myriad of factors. It gives these businesses a lifeline that they can hold on to to be able to pursue their business goals, as well as access to additional funding for any immediate or urgent needs of the business. This is why these common misconceptions should be put to rest so more businesses would be encouraged to try and explore these alternative options. 


Types of alternative financing you may want to explore 

There are already lots of alternative financing options out there that businesses can consider. Bearing in mind what’s best for the company. Here are some options: 

Invoice financing – this alternative financing involves the sale of a business’s unpaid invoices to factoring companies. They pay a certain percentage of the invoice amount to the business. 

Merchant cash advance – under this financing, the business owner receives a lump sum amount from the financier. In return, the business owner will pay the financier a certain portion of its revenue from credit card and debit card sales.  

Credit card splits – in this financing, businesses can have a credit card split agreement where the financier will provide a lump sum amount for the business’ urgent funding needs. In return, the financier will have a portion, or “split,” on payments made to the business using a credit card.


These are but a few examples of alternative financing that are available for businesses. Moreover, it is not uncommon nowadays for banks to partner with alternative financing providers. This way, businesses need not navigate on their own to find the best funding that would suit their needs. For businesses, now is the best time to explore and get to know more about these alternative financing options.