Invoice factoring in Georgia

Who uses invoice factoring in Georgia?

Georgia businesses that factor are usually suppliers, subcontractors and service firms selling to large, slow-paying customers. The state’s receivables are anchored by a handful of big payer groups: the supply chains around the Port of Savannah, automotive and aerospace manufacturing on the coast and in middle Georgia, Atlanta’s concentration of corporate headquarters and its airport, and federal installations such as Fort Stewart, Robins Air Force Base, Moody Air Force Base and Naval Submarine Base Kings Bay.

Those payers are generally good credit and generally on net 45 to net 90 terms. A funder looks at them first, then at your paperwork. That is why a young company with a strong customer list can often qualify for factoring when a bank line is out of reach.

We work with businesses across Georgia, from metro Atlanta to Savannah, Augusta, Macon and Columbus. If you are inside the perimeter, the Atlanta factoring page goes deeper on local payers.

What does Georgia’s commercial financing disclosure law require?

Georgia’s commercial financing disclosure law, passed as Senate Bill 90 in 2023 and effective January 1, 2024, requires covered providers to give a written cost disclosure on commercial financing transactions of $500,000 or less. It expressly reaches accounts receivable purchase transactions, which includes invoice factoring.

Providers that complete only a handful of such transactions in Georgia in a year are exempt, as are banks and other federally insured depository institutions and deals over $500,000. Enforcement is by the state Attorney General; the law does not create a private right of action.

In practice, the disclosure gives you dollar figures to compare: the total amount financed, what is actually disbursed after fees or payoffs, the total you will repay or forgo, the total cost, and how payments work. Like Florida’s law, Georgia’s does not require an APR. Lay two offers side by side in our proposal decoder and read what a factoring proposal should include.

If an offer under $500K arrives with no disclosure, ask for one. A provider that refuses to show total dollar cost is telling you something.

How do UCC filings work for a Georgia factor?

Georgia is unusual: UCC financing statements are filed with the Clerk of Superior Court in any of the state’s 159 counties, not with the Secretary of State. Each filing is transmitted to the Georgia Superior Court Clerks’ Cooperative Authority (GSCCCA), which keeps a single statewide index.

Because the index is statewide, one search of the GSCCCA database shows liens filed in every county. A funder will run that search on your exact legal name before it funds and will file its own UCC-1 on accounts receivable at closing. Anyone already claiming your receivables, such as a bank, an SBA lender or an MCA provider, must release, subordinate or sign an intercreditor agreement first.

Search yourself before you apply. Old filings from paid-off lenders are common, and getting a UCC-3 termination can take a week or more. See UCC liens and intercreditor agreements and, if an SBA loan sits in first position, factoring with an SBA loan.

What do Georgia lien and bond rules mean for construction factoring?

Georgia lien rights are short-fused, and funders check them before advancing on a subcontractor’s pay application. Described generally:

• Claim of lien: generally must be filed within 90 days after your last furnishing of labor, services or materials on a private project.
• Enforcement: suit generally must be started within 365 days after the lien is filed, followed by a recorded notice of the action.
• Notice to Contractor: when the owner or contractor files a Notice of Commencement, lower-tier subs and suppliers generally must serve a Notice to Contractor within 30 days of first furnishing (or of the Notice of Commencement, whichever is later) to keep lien rights.
• Lien waivers: Georgia prescribes statutory interim and final waiver forms. Read each one before signing, and ask counsel how a waiver signed before you are paid affects your rights.
• Public projects: you cannot lien public property. Payment bonds take their place, and claimants generally must give written notice within 90 days of last furnishing, with suit within one year of project completion.

How fast must Georgia owners and contractors pay?

Georgia’s Prompt Pay Act (O.C.G.A. 13-11-1 and following) generally requires an owner to pay a contractor within 15 days of receiving a pay request, and a contractor to pay its subs and suppliers within 10 days of receiving payment. Late amounts can carry interest of 1% per month. The Act has exclusions, and public contracts can carry payment terms of their own, so confirm which rules apply to your project.

Two caveats matter to a factor. First, parties can agree to different payment terms in the contract, and those terms generally control. Second, a contractor’s duty to pay a sub is commonly tied to the contractor getting paid first. So a funder will read your subcontract, not just the statute, to decide how fast a pay app will turn.

Federal receivables follow federal rules. If your customer is a base or a federal agency, the Assignment of Claims Act governs the assignment to a factor; our government contractors page walks through it.

Which Georgia industries are the best fit for factoring?

The best fits are businesses with creditworthy commercial or government customers and a gap of 30 days or more between doing the work and getting paid.

• Industry guides: manufacturers, wholesale and distribution, staffing agencies, business services.

What should a Georgia supplier prepare before applying?

Prepare the documents a funder will ask for in the first call, and the process moves from weeks to days. Georgia files that stall usually stall on lien releases or missing proof of delivery, not on credit.

• An AR aging by customer, current within the last two weeks, plus a customer list with contact names for verification.
• Sample invoices with backup: purchase orders, signed bills of lading or delivery receipts, approved timesheets, or accepted pay applications.
• Your GSCCCA search results and payoff or release letters from any lender claiming receivables.
• Contracts with your largest customers, especially any clause restricting assignment of receivables, which a funder will need to address.
• Tax status: proof that payroll and sales taxes are current, or a copy of any payment plan. See tax liens if one has been filed.
• For construction: Notices to Contractor served, any Notice of Commencement on the job, and every lien waiver you have signed.

What does factoring cost a Georgia business?

Factoring fees in Georgia commonly run roughly 1% to 5% of invoice value per 30 days, the same range you will see nationally. The biggest drivers are your customers’ credit, your monthly volume and how long invoices stay open.

A supplier billing $400,000 a month to a large manufacturer that pays in 45 days will price very differently from a sub billing $60,000 a month across five small contractors. Concentration also matters: if one Georgia plant is most of your sales, the funder may cap that customer’s share. Read customer concentration if that is you.

Under $500,000, the state disclosure gives you a total dollar cost to compare. Above it, ask for the same figures anyway. Then model it in the factoring cost calculator.

Step by step

1. Search the GSCCCA indexSearch your exact legal name in the statewide UCC index and list every lender claiming receivables.
2. Pull an aging by customerShow who owes you, how much and how long they take to pay.
3. Collect lien paperwork if you buildNotices to Contractor, the Notice of Commencement if one was filed, lien waivers signed, and the schedule of values.
4. Compare disclosures and agreementsFor deals of $500K or less, line up the state disclosures; check every fee against the contract.
5. Close and notify customersCustomers receive a notice of assignment and pay the funder; you draw advances as you invoice.