> For the complete documentation index, see [llms.txt](https://triple-plus-global.gitbook.io/tpt-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://triple-plus-global.gitbook.io/tpt-whitepaper/products/invoice-factoring.md).

# Invoice Factoring

**Status: 🔨 In Development (Q2 2026)**

The core trade finance product enabling invoice tokenization.

***

## 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.

***

## How Invoice Factoring Works

{% @mermaid/diagram content="flowchart TD
subgraph Business\["Business (Seller)"]
B1\["Holds $100K invoice<br/>Due in 60 days"]
B2\["Needs cash now"]
end

```
subgraph Platform["TPT Platform"]
    P1["Verification"]
    P2["Listing at 5% discount"]
    P3["Smart Contract Escrow"]
end

subgraph Investor["Investor"]
    I1["Pays $95,000"]
    I2["Waits 60 days"]
    I3["Receives $100,000"]
end

B1 --> P1
B2 --> P1
P1 --> P2
P2 --> I1
I1 --> P3
P3 -->|"Immediate"| B2
P3 -->|"At maturity"| I3" %}
```

***

## 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              |

***

## 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                |

***

## 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 |

***

## 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

***

## 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 |

{% hint style="info" %}
Invoice Factoring Marketplace launches Q2 2026. [Join Waitlist →](https://quick-badge-086985.framer.app/)
{% endhint %}