Invoice Factoring (Affacturage)

What it is

Invoice factoring (affacturage) is the practice of selling outstanding client invoices to a specialist finance company — the factor — at a discount of 2–5 %, in exchange for immediate cash settlement, typically within 24–48 hours of submission. For freelance SAP analytics consultants operating under 60–90-day client payment terms — standard in large SI engagements and CAC 40 end-customer programmes — factoring converts a paper receivable into working capital without waiting two to three billing cycles.

Why it exists. The structural mismatch between a freelance consultant's cash outflows (accountant, URSSAF, software, rent — all monthly) and a client's payment cycle (often 60 or 90 days net) creates a working-capital gap that grows in direct proportion to billing volume. A consultant invoicing €30,000/month under 90-day terms effectively finances €90,000 of client debt at any given time. Factoring closes that gap.

How it works — four mechanics. (1) Submission: consultant sends invoice + delivery evidence to the factor's online portal. (2) Advance: factor pays 80–95 % of the invoice face value within 24–48 hours. (3) Collection: factor chases the client for settlement (with-recourse) or absorbs the credit risk (without-recourse / non-recourse). (4) Balance + fee: once the client pays, the factor releases the held-back 5–20 %, minus the factoring fee (all-in: 2–5 % of invoice value, covering both the advance fee and the credit-risk premium). Non-recourse factoring costs 0.5–1 % more but transfers insolvency risk to the factor — worth it on any client exceeding 20 % of your revenue.

Why it matters

• A consultant invoicing €30,000/month at 90-day terms is permanently financing €90,000 of client debt — factoring exists specifically to close that gap.
• Non-recourse factoring costs 0.5-1% more but transfers insolvency risk to the factor entirely — worth it once any single client exceeds 20% of revenue.
• Public-sector procurement contracts in France commonly prohibit assignment of receivables — this must be checked before engaging a factor, not after.

Key points

• The practice of selling unpaid invoices to a finance company for immediate cash (at a 2-5% discount).
• A cash-smoothing tool when clients have 60-90 day payment terms, not a distress signal when used strategically.
• Non-recourse factoring costs 0.5-1% more than recourse but transfers insolvency risk to the factor entirely — worth it once a single client exceeds roughly 20% of revenue.
• French public-sector procurement contracts commonly prohibit assignment of receivables ('incessibilité des créances') — check the contract before engaging a factor, not after signing up.
• The LME (Loi de Modernisation de l'Economie, 2008) caps standard French B2B payment terms at 60 days net or 45 days end-of-month — the structural reason factoring exists for consultants at all.
• The Dailly assignment (loi Dailly, 1981) is a distinct, bank-only short-term credit mechanism — not the same instrument as factoring through a commercial factor, though both mobilize the same receivable.
• Factors increasingly run automated, ML-based credit scoring on the debtor and fraud detection on submitted invoices — the reason turnaround has compressed to 24-48 hours industry-wide.
• A consumption-metered AI Core / generative-AI-hub invoice is structurally harder for a factor to underwrite quickly than a fixed time-and-materials invoice — negotiate a fixed milestone amount into the statement of work to keep such invoices factorable on standard terms.

Terms used on this page

Affacturage

French term for invoice factoring — the sale of trade receivables to a finance company (factor) at a discount in exchange for immediate cash.

Factor

The finance company that purchases invoices from the consultant, advances cash, collects from the client debtor, and charges a fee for the service.

Recourse factoring

Factoring with recourse: if the client defaults, the consultant must repay the advance to the factor. Lower fee (2–3.5 %) but credit risk stays with the consultant.

Non-recourse factoring

Factoring without recourse: the factor absorbs the credit risk of client non-payment. Higher fee (+0.5–1 %) but consultant is fully protected from client insolvency.

Advance rate

The percentage of invoice face value the factor pays immediately (typically 80–95 %). The remainder (holdback) is released after client payment minus the fee.

Cession de créance

Legal assignment of a trade receivable from the creditor (consultant) to the factor. Governed by the Dailly Law (loi Dailly) in France for professional receivables.

LME

Loi de Modernisation de l'Economie (2008) — caps French B2B payment terms at 60 days net or 45 days end-of-month; violations trigger administrative fines up to €75,000.

Sources

1. ASF — Statistiques de l'affacturage en France 2023
2. Legifrance — Art. L.441-10 Code de commerce (LME délais de paiement)
3. Corporate Finance Institute — Accounts Receivable Factoring
4. Bankrate — What is invoice factoring and how does it work
5. Bill.com — What is invoice factoring
6. Bibby Factor — Comprendre la cession Dailly : le guide complet
7. Factors France — Qu'est-ce que la loi Dailly ?
8. Trustpair — Loi LME : quels impacts sur les délais de paiement ?
9. Coface — Loi LME : comprendre son impact sur les délais de paiement
10. Recouvrer.fr — Loi LME, délai de paiement : fonctionnement 2026
11. Affacturage.fr — Loi LME : délai de paiement des factures clients pour les entreprises
12. Victoris Avocat — Cession Dailly et cession de créance Dailly : guide complet du mécanisme de financement des entreprises