Invoice Financing / Factoring at M&T Bank

M&T Bank's Invoice Financing and Factoring solution is designed to help growing businesses convert outstanding accounts receivable into immediate working capital. Whether you are a manufacturing, distribution, professional services, or staffing firm, this product provides predictable cash flow, reduces days sales outstanding (DSO), and strengthens your balance sheet without adding long-term debt. By leveraging approved customer invoices, M&T Bank enables you to access funds quickly and deploy capital where it matters most — payroll, inventory, new opportunities, or seasonal growth.

How It Works

Invoice financing, often referred to as factoring, allows a business to sell its eligible receivables to M&T Bank at a discount for an immediate cash advance. The process typically follows these steps:

• Client submits invoices from creditworthy customers to M&T Bank for approval.
• M&T Bank verifies invoices and customer creditworthiness.
• Upon approval, M&T Bank advances a percentage of the invoice value (commonly 70–90%).
• When customer payment is received, the remaining balance is remitted to the client, minus fees and any reserve.

Key Features and Benefits

• Immediate Liquidity: Convert unpaid invoices into cash within days, reducing cash conversion cycles and enabling faster reinvestment.
• Flexible Funding: Finance invoices on a recurring or selective basis based on business needs and seasonal demands.
• Improved Working Capital: Maintain or expand operations without taking on long-term debt or diluting ownership.
• Credit Management: Access to professional receivables management, credit assessment, and collections support to reduce bad debt exposure.
• Transparent Pricing: Competitive factoring rates and clear fee structures tailored to invoice volumes, customer risk, and terms.
• Scalable Solutions: Funding capacity grows with your receivables, aligning financing availability with business expansion.
• Enhanced Relationships: Timely payments to suppliers and consistent cash flow help strengthen vendor and customer relationships.

Types of Factoring Offered

• Recourse Factoring: Lower cost option where the business retains some responsibility if an invoice goes unpaid.
• Non-Recourse Factoring: Protection against customer insolvency risk; coverage depends on approved accounts and credit insurance elements.
• Selective Factoring: Ability to choose which invoices to finance, ideal for seasonal or project-based needs.
• Full-Service Factoring: Includes billing and collections administration, improving operational efficiency and reducing administrative burden.

Eligibility and Underwriting

Eligibility for invoice financing with M&T Bank is determined primarily by the creditworthiness of your customers, the quality and aging of receivables, and the overall financial health of your business. Typical considerations include:

• Invoice age and payment terms
• Concentration of receivables by customer
• Customer payment history and credit profile
• Business operational history and financial statements
• Industry sector and inherent risk factors

M&T Bank's experienced underwriting team evaluates each opportunity to structure an arrangement that balances funding needs with credit risk management.

Pricing and Fees

Factoring fees vary by transaction size, customer credit quality, advance rates, and services selected (such as collections or credit protection). Typical pricing components include:

• Discount fee or factoring rate — charged as a percentage of invoice value.
• Advance rate — percentage of invoice funded up front.
• Reserve holdbacks — funds held until invoice payment to cover disputes or deductions.
• Service fees — administrative or account management charges when applicable.

Transparent fee quotes are provided during underwriting so businesses can compare projected cost of capital to alternatives like lines of credit or term loans.

Use Cases and Typical Customers

Invoice financing is particularly well-suited to businesses that invoice established commercial customers on net terms and experience cash flow gaps due to payment cycles. Common users include:

• Wholesalers and distributors managing inventory seasons
• Manufacturers scaling production between receivable cycles
• Staffing firms managing payroll ahead of client payments
• Professional service firms seeking predictable cash flow for growth

Risk Management and Controls

M&T Bank employs disciplined credit analysis, customer verification processes, and ongoing monitoring to manage risk. Tools include customer credit checks, concentration limits, dispute resolution procedures, and structured reserve policies. For businesses opting for non-recourse features, eligible accounts are evaluated for credit-insurable status to mitigate insolvency exposure.

Integration and Operational Support

The bank supports integrations with common accounting and invoicing systems to streamline submission, funding, and reconciliation. Dedicated account teams help onboard clients, define eligible receivable criteria, and provide ongoing support for collections, reporting, and cash management. This operational partnership reduces administrative burden and allows business owners to focus on growth.

How to Get Started

To assess whether invoice financing suits your business, prepare recent accounts receivable aging reports, customer concentration details, and financial statements. A consultation with a factoring specialist will clarify structure options, anticipated advance rates, and fee estimates. M&T Bank will work with you to design a solution aligned with your cash flow objectives and operational model.

Conclusion

Invoice Financing and Factoring at M&T Bank can be a powerful liquidity tool for businesses that invoice established customers and seek faster access to earned revenue. By converting receivables into working capital, companies can stabilize operations, pursue growth, and manage seasonal fluctuations without incurring traditional long-term debt. With flexible structures, transparent pricing, and dedicated support, this product provides a pragmatic alternative to bridge cash flow gaps and accelerate business momentum.

Address Bank: One M&T Plaza Buffalo, New York, U.S.
Bank: M&T Bank
Headquarters: Buffalo
Products: Loans & Credit
Type: Invoice Financing / Factoring