An invoice is submitted to the factor. Most factoring will want in addition to the invoice some type of supporting documentation showing the work was completed or the service was rendered. This could be a bill of lading, a signed time cared, or even the invoice itself signed by the customer.
The factor purchases the invoice and sends the agreed upon amount (say 90% advance rate) to your bank account.
Your customer will send payment to your factor (or their bank). The factor will then send you the remaining portion, less the fee for financing the invoice.
In some non-recourse situations, the factor will advance 100% less the fee.See Today's Rates