The process involves three parties: the business (seller), the customer (debtor), and the factor (lender). After delivering goods or services, the business issues an invoice to the customer. Instead of waiting for the payment term to expire, the business sells the invoice to the factor, who advances a percentage of the invoice value (typically 70-90%). Once the customer pays the invoice, the factor remits the remaining balance to the business, minus the factoring fee.

Revenue Advances offer several benefits to businesses such as flexible repayment terms tied to revenue or receivables, easing cash flow constraints. Advances also provide quick access to funding without the need for extensive paperwork or collateral that banks require..

Invoice factoring is suitable for businesses that invoice customers with credit terms, such as net-30 or net-60, and experience cash flow gaps due to slow-paying customers. It's commonly used by small and medium-sized businesses across various industries.

Most business-to-business (B2B) invoices are eligible for factoring, including invoices for completed goods or services that are not subject to disputes or contingent payments. However, factors may have specific criteria regarding the age and creditworthiness of the invoices.

The cost of invoice factoring typically includes a discount fee, expressed as a percentage of the invoice value, and a factor's fee, which may be a flat rate or a percentage of the invoice value. Fees are based on items such as the creditworthiness of the customer, the volume of invoices, and the duration until payment.

In non-recourse factoring arrangements, the factor assumes the risk of non-payment by customers. However, factors may conduct credit checks on customers and may decline to factor invoices from high-risk customers. In recourse factoring, the business remains liable for unpaid invoices and may need to repurchase them or replace them with other invoices. n90 typically will only factor with recourse.