Invoice Factoring

Status: 🔨 In Development (Q2 2026)

The core trade finance product enabling invoice tokenization.

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What It Does

Businesses sell their unpaid invoices at a discount for immediate cash. Investors purchase these invoices and collect the full amount when the debtor pays.

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How Invoice Factoring Works

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Example Transaction

Item	Value
Invoice Face Value	$100,000
Payment Terms	Net 60
Discount Rate	5%
Seller Receives	$95,000 (immediate)
Investor Pays	$95,000
Investor Receives	$100,000 (at maturity)
Investor Profit	$5,000
Annualized Yield	~31% APY

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Yield Derivation

Expected yields of 5-10% APY derive from:

Factor	Description
Discount Rate	Typically 1-3% per 30 days
Annualization	30-day invoice at 2% discount ≈ 24% APY
Risk Adjustment	Higher-risk debtors command higher discounts
Market Dynamics	Supply/demand affects pricing

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Risk Parameters

Each invoice listing includes:

Parameter	Description
Debtor Rating	Creditworthiness score (A/B/C/D)
Invoice Age	Days since issuance
Payment Terms	Original net terms (30/60/90)
Seller History	Default rate, volume, tenure
Concentration	% of debtor's payables on platform

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Verification Requirements

Sellers Must Provide:

• Business registration documents

• Invoice and proof of delivery

• Debtor contact information

• Bank statements showing relationship

Invoices Must Meet:

• Minimum face value threshold

• Maximum days outstanding

• Verified debtor (not on exclusion list)

• No existing liens or assignments

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Benefits

For Sellers (Businesses)

Benefit	Description
Instant Liquidity	Cash in days, not months
No Debt	Asset sale, not a loan
Preserve Credit Lines	Doesn't affect banking relationships
Flexible	Choose which invoices to factor

For Investors

Benefit	Description
Real Yields	Backed by commercial cash flows
Short Duration	30-90 day typical maturities
Diversification	Multiple debtors and industries
Transparency	On-chain settlement and tracking

Invoice Factoring Marketplace launches Q2 2026. Join Waitlist →