Usually not, at least not once an invoice is significantly overdue. Most factoring companies will only buy invoices that are current or recently due, commonly within 30 days of the due date, and very few will touch an invoice past 90 days.
The reason is simple: a factor makes money by advancing cash against invoices that will reliably get paid, and the longer an invoice sits unpaid, the less reliable that payment becomes. That said, “past due” covers a wide range. An invoice five days late is a very different thing from one that is four months old, and your options change accordingly.
Here’s what factors will and won’t accept, and what to do with the rest.
Why Factors Avoid Overdue Invoices
Factoring is built on the expectation that your customer will pay close to the invoice terms. When an invoice slips past due, two problems appear at once.
First, the risk of nonpayment climbs. An invoice that is already late is statistically more likely to stay unpaid, and the factor would be advancing cash against a receivable that may never clear. Second, an aging invoice often signals a deeper issue, whether a dispute over the work, a customer in financial trouble, or a billing error. None of those are things a factor wants to inherit.
This is why most factoring agreements set an age limit. Invoices within terms or just past them are routine. Invoices that have aged 60, 90, or more days fall outside what most factors will fund.
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What Counts as Past Due in Factoring
Not every late invoice is treated the same. Factors generally sort receivables by age:
- Current or recently due (0 to 30 days past due): Routinely factorable, assuming the customer and paperwork check out.
- Moderately late (30 to 60 days past due): Sometimes factorable, often at a lower advance rate or higher fee, and only with a strong, creditworthy customer.
- Significantly aged (60 to 90+ days past due): Rarely factorable through traditional factoring. The receivable looks too risky.
Keep in mind that factors usually evaluate invoices against their original payment terms. An invoice on net 60 terms that is 45 days out is not late at all, while a net 15 invoice at the same age is well past due. Our guide to invoice factoring for small business covers how those terms and timelines work in a standard arrangement.
The Better Move: Factor Before Invoices Age
Here’s the practical lesson buried in all of this. Factoring works best as a proactive tool, not a rescue. If slow payment is a recurring problem, the time to set up a factoring relationship is before your invoices go past due, so you can factor them while they’re fresh and get paid in days rather than waiting on net 30 or net 60 terms.
Imagine a commercial landscaping company that routinely waits 60 days for its property-management clients to pay. Rather than letting those invoices age and create a cash crunch, the owner factors each invoice as soon as the work is billed, advancing most of the value within a few days. The invoices never become past-due problems, because they’re converted to cash long before the due date arrives. That’s the model factoring is designed for.
What to Do with Invoices That Are Already Overdue
If you’re sitting on aged receivables that factors won’t buy, you still have options:
- Collections effort. Systematic follow-up, payment plans, and clear dunning can recover more overdue invoices than owners expect. Start before the debt gets older.
- A revenue-based loan or line of credit. When the problem is a cash gap rather than a specific invoice, financing that looks at your overall revenue can bridge it. A business line of credit gives you flexible capital you draw against as needed, independent of any single invoice’s status.
- A short-term loan. For an immediate, defined funding need, a short-term loan provides a lump sum based on your business’s revenue rather than the age of a particular receivable.
The key difference: factoring funds a specific invoice, while revenue-based financing funds your business. When your invoices have aged past what a factor will accept, shifting to revenue-based options is usually the faster path to working capital. The SBA notes that late payments and overdue invoices can cause serious cash flow problems and lists several financing tools for exactly this situation.
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Frequently Asked Questions
How old can an invoice be to factor it?
Most factors buy invoices that are current or within about 30 days of their due date. Some will consider invoices 30 to 60 days past due at reduced advance rates, but very few will factor anything aged beyond 90 days, since the risk of nonpayment becomes too high.
Why won’t factoring companies buy old invoices?
An overdue invoice is more likely to go unpaid and often signals a dispute, a billing problem, or a customer in financial trouble. Factors advance cash expecting reliable payment, so they avoid receivables that have already shown signs of trouble.
Can you factor an invoice that’s only a few days late?
Usually yes. An invoice a few days past due, with a creditworthy customer and clean paperwork, is generally still factorable on standard terms. Problems arise as invoices age into the 60-to-90-day range and beyond.
What can you do with invoices factors won’t buy?
Pursue collections promptly, and for the underlying cash gap, consider revenue-based financing such as a business line of credit or a short-term loan. These fund against your overall revenue rather than a specific invoice, so the age of the receivable doesn’t disqualify you.
Is invoice factoring the same as a collections service?
No. A factor buys current invoices to give you cash upfront and then collects on them at maturity. A collections agency pursues debts that are already overdue, typically for a contingency fee. Factoring is a funding tool, not a recovery service for old debt.
