How Does Accounts Receivable Factoring Apply to Real Estate?

Accounts Receivable Factoring in Real Estate

Accounts receivable factoring in real estate involves property management firms, contractors, or real estate service providers selling their outstanding invoices (rent receivables, maintenance fees, or construction payments) to a factoring company at a discount for immediate cash flow. This is commonly used by property managers awaiting rent payments, commercial landlords with long-term lease receivables, or developers facing delayed payments from tenants or clients.

By converting receivables into cash, businesses can cover operating expenses, fund new projects, or manage short-term liquidity without waiting for payments, though it comes at the cost of a factoring fee or discount.