In manufacturing, consistent cash flow is essential to sustaining operations, purchasing raw materials, and meeting payroll—yet payment delays remain one of the biggest threats to financial stability. As supply chain pressures resurface in 2025 and customers extend their payment timelines, manufacturers are once again facing strained receivables and tightening liquidity.
One of the most effective and underutilized tools in this situation is invoice factoring. Designed specifically for B2B businesses, invoice factoring allows manufacturers to convert unpaid invoices into immediate working capital. In this blog, we’ll explore how invoice factoring works, how it compares to traditional loans, and why it’s a strategic solution for manufacturers navigating delayed payments.
The State of Manufacturing in 2025: Delays Are Back
After a brief period of stability, supply chain turbulence has returned in 2025. Component shortages, shipping bottlenecks, and labor disruptions are all contributing to longer lead times and increased cost pressures. As a result, many manufacturers are seeing a spike in late customer payments.
Key contributing factors include:
- Buyers extending net terms to 60, 90, or even 120 days
- Delayed production cycles due to supplier inconsistencies
- Increased use of just-in-time inventory models, causing invoicing gaps
These delays can jeopardize a manufacturer’s ability to fund new purchase orders, keep up with operating expenses, or take on growth opportunities.
What Is Invoice Factoring?
Invoice factoring is a form of financing where a business sells its outstanding invoices to a third-party factoring company (like Platform Funding) in exchange for immediate cash—typically 70-90% of the invoice value upfront, with the remaining balance (minus fees) paid once the invoice is collected.
Unlike a loan, invoice factoring is not debt. It leverages your existing receivables, so there are:
- No repayments
- No impact on your credit score
- No waiting for slow-paying customers
How It Works:
- You issue an invoice to your customer.
- You send that invoice to the factoring company.
- The factoring company advances a large portion (e.g., 85%) within 24-48 hours.
- Once your customer pays, you receive the remaining balance, minus a small fee.
Invoice Factoring vs. Delayed Payment Loans
Many manufacturers seek out delayed payment financing options such as working capital loans or lines of credit. But these often come with fixed repayment schedules, interest, and credit requirements.
Invoice factoring offers distinct advantages:
| Feature | Invoice Factoring | Traditional Loan |
| Speed | Fast (24-48 hrs) | Slower (days/weeks) |
| Collateral | Based on invoices | Often requires collateral |
| Repayment | None | Fixed monthly payments |
| Credit Impact | None | Reported to bureaus |
| Flexibility | Scales with sales | Fixed limits |
For businesses with high accounts receivable and long customer payment terms, invoice factoring is often the more adaptive, low-risk option.
Use Case: How a Manufacturer Overcame Payment Delays
Let’s say a mid-sized packaging manufacturer ships $400,000 in product monthly to five major B2B clients, all on net-90 terms. With material costs rising and payroll due every two weeks, cash flow becomes tight.
Instead of taking on more debt, the company uses invoice factoring with Platform Funding:
- Submits $400,000 worth of invoices
- Receives $340,000 (85%) within 48 hours
- Uses that capital to purchase raw materials, pay suppliers, and meet payroll
- Receives the remaining 15% once clients pay, minus a small service fee
This cycle continues monthly, allowing the business to operate with confidence despite delayed receivables.
Benefits of Invoice Factoring for Manufacturers
1. Immediate Access to Capital
Manufacturers often operate on thin margins. Factoring allows you to turn your invoices into working capital without waiting 30-90 days.
2. Improved Cash Flow Predictability
No more guessing when you’ll be paid. You gain a steady, predictable stream of capital to manage day-to-day operations.
3. No Added Debt
Unlike loans, invoice factoring doesn’t affect your debt-to-equity ratio, making your balance sheet cleaner for investors or lenders.
4. Support During Growth Spurts
Scaling your manufacturing operation? Factoring gives you the cash to fulfill larger orders, hire labor, or expand capacity.
5. Back-Office Support
Many factoring services include collections management, saving your finance team valuable time.
When Should Manufacturers Use Invoice Factoring?
Invoice factoring is most effective when:
- Your clients pay in 30+ days
- Your business is growing but liquidity is strained
- Your receivables exceed $50,000/month
- You need working capital for supplies, staffing, or equipment
- Traditional loan approval is slow or unlikely due to limited collateral
Industries that frequently benefit include:
- Metal fabrication
- Packaging and printing
- Electronics assembly
- Automotive parts manufacturing
- Chemical and plastics production
How Platform Funding Makes It Easy
Platform Funding specializes in B2B cash flow solutions like invoice factoring tailored to manufacturers. Our process is fast, transparent, and built to help you bridge receivable gaps without hassle.
What You Get:
- Advance rates up to 90% of invoice value
- Same-day approvals and funding within 48 hours
- No hidden fees, minimums, or long-term contracts
- Dedicated support from funding specialists
We evaluate your receivables, customer strength, and cash flow history—not just your credit score.
Getting Started: Step-by-Step
- Schedule a Consultation: Talk to a Platform Funding specialist about your cash flow needs.
- Submit Invoices: Share eligible unpaid invoices from reputable B2B clients.
- Get Funded: Receive up to 90% of your receivable within 1-2 business days.
- Operate Stress-Free: Focus on running your facility while we manage collections.
- Receive Final Balance: When your customer pays, we remit the remainder minus our fee.
There’s no obligation to factor all invoices—just the ones you choose.
Frequently Asked Questions
Q: How much does invoice factoring cost?
A: Fees typically range from 1-5% depending on volume, client creditworthiness, and terms. We offer transparent pricing with no hidden charges.
Q: Will my clients know I’m using a factoring company?
A: Yes, in most cases. We communicate professionally with your customers to ensure smooth payments. Our goal is to protect your relationships, not replace them.
Q: Can I still offer net-30 or net-60 terms to clients?
A: Absolutely. Invoice factoring allows you to maintain competitive payment terms while accessing your funds immediately.
Q: Is there a minimum invoice amount?
A: While we typically work with businesses factoring $50,000 or more in monthly receivables, we assess each client individually.
Q: How is this different from a loan?
A: Factoring is not debt. It’s an advance on money already owed to you, so there are no repayments, interest rates, or credit implications.
Final Thoughts: Your Invoices Can Work Harder for You
In a manufacturing environment where cash flow delays are becoming the norm, invoice factoring offers a simple, scalable solution. It provides immediate liquidity without debt, enabling you to take control of operations, pursue growth, and ride out the uncertainties of 2025 supply chain dynamics.
Whether you’re dealing with net-90 payment terms or sudden client slowdowns, Platform Funding’s invoice factoring services give you the tools to thrive—not just survive.
Ready to unlock the cash in your receivables? Contact us today to learn how invoice factoring can strengthen your manufacturing cash flow.
