Commercial Real Estate vs. Invoice Factoring: Compare Business Funding
CRE loans vs. invoice factoring — long-term property financing compared to same-day receivables acceleration.
Commercial Real Estate Loan: Commercial real estate loans finance the purchase, renovation, or refinance of income-producing or owner-occupied commercial property. Invoice Factoring: Invoice factoring converts outstanding B2B invoices into immediate working capital — the factor advances a percentage and collects from your customers.
Commercial Real Estate Loan vs. Invoice Factoring — side by side
| Commercial Real Estate Loan | Invoice Factoring | |
|---|---|---|
| Typical amount | $250,000 – $25,000,000 | $10,000 – $5,000,000 |
| Typical term | 5 – 30 years | 30 – 90 days per invoice |
| Rate | 6% – 12% APR | 1% – 5% per 30 days |
| Minimum time in business | 2 years | 6 months |
| Minimum credit score | 650+ | No minimum (based on your customers) |
Which is right for your business?
- Commercial Real Estate Loan tends to fit best when you need purchase or renovation.
- Invoice Factoring tends to fit best when you need payroll or supplier payments.
Frequently asked questions
Does a factoring UCC lien block a CRE loan?
Factoring companies file a UCC-1 against receivables; CRE lenders take a mortgage against the property — different collateral classes. In most cases the factoring lien does not block a CRE loan, but disclose it upfront to the CRE lender.
Can I use a CRE cash-out refinance instead of factoring?
You can, but a refinance takes 45–90 days and has closing costs of 2–5%. Factoring funds in 24–48 hours at 1–5% per 30 days. For acute short-term gaps, factoring is almost always faster and simpler.
