Factoring for Small Businesses 2026 — When It Pays
Long payment terms can sink even a healthy business. Factoring converts unpaid invoices into cash within 24-48 hours. In 2026 the offer for microentrepreneurs is the broadest in history, with costs below 1% monthly.
How factoring works
You sell an unpaid receivable to a factoring company. Within a day you receive 80-95% of the invoice amount, the rest after the contractor pays — minus the factor's commission. Typical cost: 0.8-1.5% of invoice value plus interest on the advance (WIBOR + 2-4 pp annually).
When it pays off
Factoring makes sense when sales margin exceeds the cost. At 15% margin and 1.2% monthly commission, financing absorbs less than 10% of profit. Works well in industries with long payment terms: construction, transport, B2B. Less profitable for short terms (up to 14 days) or thin margins.
Bookkeeping and taxes
Factoring is VAT-exempt (Art. 43.1.38 of the VAT Act). The factor's commission is a tax-deductible expense in PIT/CIT, recorded in KPiR column 13. The advance is not revenue — it's a settlement with the factor (account 244/249). Revenue remains booked per the original invoice.
Summary
Before signing, compare 3-4 offers and make sure you understand the full cost — not just commission, but also interest and additional fees.