Factoring for IT and service firms: get paid for the work while clients take 30 to 90 days.
Service firms rarely have what a bank wants to lend against: no inventory, no equipment, no property. What you do have is invoices to solid companies. Factoring turns those invoices into cash, and the approval looks at your clients' financial strength, not yours.
Daniel Chirino · Business Development Officer, 1st Commercial Credit
Updated: October 28, 2026
Why service firms run short of cash
- Clients pay in 30 to 90 days, but payroll is due much sooner.
- Payroll and payroll taxes start falling behind.
- The money the owners put in runs out faster than planned.
- A spike in sales disrupts fixed expenses.
Banks prefer to lend against land, property, inventory and assets they can auction. That's why so many service companies are turned down or approved for very little working capital, even when sales are growing. Factoring works the other way around: what counts is that your clients are companies that pay.
How factoring works for a service firm
Send the invoices
Submit the invoices for work you already completed.
Get funded
1st Commercial Credit verifies the invoices and advances part of their value within 24 hours.
Your client pays 1st Commercial Credit
Directly, on its normal terms. You receive the rest of the invoice, minus the fee.
What 1st Commercial Credit offers service firms
The offer
- Rates from 0.69% to 1.59%, depending on your volume, how fast your clients pay and their credit. Custom rates are available.
- From about $10,000 a month in sales up to $10 million in receivables.
- Initial setup in 3 to 5 days, with same-day decisions.
- No financial statements required. Low credit scores accepted.
- No upfront, hidden, facility, audit or invoice minimum fees.
- Purchase order financing and supply chain finance are also available.
Who it's for
Firms that provide professional services to other companies: IT consulting, IT staffing, architecture, design and engineering, consulting firms, inspection and appraisal companies, technology training schools, attorneys, accountants and CPAs, marketing firms and public relations agencies.
The rule is simple: if you provide services to other businesses on credit terms, you can factor those invoices.
Source: 1st Commercial Credit's service providers page, read October 28, 2026. Rates and terms are confirmed in writing before you sign.
When factoring is not the answer for a service firm
- Your clients pay on receipt or in under 15 days.
- Your clients are individuals, not companies. Factoring works on invoices to commercial accounts.
- You bill before the work is done. Factoring is for invoices for completed work.
- The problem is margin, not timing. If a project loses money, getting paid faster only loses it faster.
Questions service firms ask me
We don't have hard assets. Can we qualify?
That's exactly who factoring is for. 1st Commercial Credit evaluates the financial strength of your clients, the ones who pay the invoices, not assets you pledge.
Will it affect my relationship with my clients?
Your clients pay 1st Commercial Credit directly, and collections are handled discreetly and professionally. You keep serving them the same way.
Are there hidden costs?
1st Commercial Credit charges no upfront, hidden, facility, audit or invoice minimum fees. Before you sign, I'll walk you through every cost in writing.
We're an IT staffing firm. Which page is for us?
Both apply, but the staffing page covers weekly payroll funding in more detail.
Who are your clients?
Tell me who you invoice and on what terms. I'll tell you if factoring makes sense for your firm.
Also read: how invoice factoring works · government contractors · staffing