| Disclosure law | None |
|---|---|
| UCC filing office | Office of the Recorder of Deeds (Office of Tax and Revenue), acting as the Mayor's filing office under D.C. Code §28:9-501 |
| State agencies pay | The contract payment date, or if none, 30 calendar days (excluding legal holidays) after receipt of a proper invoice |
| Late-pay interest (state) | Interest penalty at a rate set by the Mayor's regulations (the statute sets a 1% floor); no penalty if paid by the 15th day after the due date |
| Lien deadline (private) | Notice of intent recorded in the land records during construction or within 90 days after the earlier of completion or termination of the project, with a copy to the owner by certified mail within 5 business days (§40-301.02) |
| Public payment bond | District construction contracts over $25,000 |
Who uses invoice factoring in District of Columbia?
Washington's receivables run through government. Federal agencies, the District government, and the contractors that serve them create a steady flow of invoices for IT services, consulting, security, janitorial, staffing and construction work. Military sites such as Joint Base Anacostia-Bolling, the Washington Navy Yard and Fort McNair buy facilities and support services. Universities such as Georgetown and George Washington, hospital systems such as MedStar Washington Hospital Center, trade associations, law firms and the convention and hotel sector round out the private payers.
Federal and District invoices are generally due 30 days after a proper invoice, but approval chains, contract modifications and year-end budget timing slow real payment. New contract awards create a cash gap before the first invoice clears. Hospitality and event vendors see spring and fall convention peaks, and construction follows the District's 7-day pass-through rules.
- Industries that factor most: Federal government contracting, IT and professional services, Security and facilities services, Construction subcontracting, Healthcare and higher education vendors, Hospitality and event services.
- Metro areas: Washington.
- Federal installations that buy from local firms: Joint Base Anacostia-Bolling, Washington Navy Yard, Fort Lesley J. McNair, Marine Barracks Washington.
Does District of Columbia regulate invoice factoring?
District of Columbia has no commercial financing disclosure law, so a factor is not required by state law to give you a standardized cost disclosure. There is no federal one for business financing either. That puts the burden on you to get every fee in writing.
Factoring is generally structured as a purchase of your invoices rather than a loan, which is why consumer lending rules and usury caps generally do not apply to it. The protections that do apply come from your contract and from the Uniform Commercial Code, which governs the sale of accounts in every state.
Ask any provider for the total dollar cost on a sample invoice, the advance rate, every fee, the term and the exit terms. Our proposal checklist lists what a good proposal shows, and the disclosure law tracker shows which states require it.
How do UCC filings work in District of Columbia?
Where UCC-1s are filed in District of Columbia: Office of the Recorder of Deeds (Office of Tax and Revenue), acting as the Mayor's filing office under D.C. Code §28:9-501. The Recorder of Deeds' online records search is run by a private vendor and requires registration or a subscription; fixture filings also go to the Recorder of Deeds.
A factor will search that index on your exact legal name before it funds, and will file its own UCC-1 on your accounts receivable at closing. Anyone already claiming your receivables, such as a bank, an SBA lender or a merchant cash advance provider, must release, subordinate or sign an intercreditor agreement first. Search your own name first at the official District of Columbia UCC search; old filings from paid-off lenders are common and can take a week or more to terminate. More in UCC liens and intercreditor agreements.
How fast do government payers in District of Columbia pay?
District of Columbia state agency deadline (D.C. Code §2-221.01 et seq. (§2-221.02)): The contract payment date, or if none, 30 calendar days (excluding legal holidays) after receipt of a proper invoice. Late interest: Interest penalty at a rate set by the Mayor's regulations (the statute sets a 1% floor); no penalty if paid by the 15th day after the due date. Prime contractors must pay subs their share, or give written notice of withholding, within 7 days of being paid by the District agency.
Federal agencies follow the Prompt Payment Act: generally 30 days after a proper invoice, with interest at the Treasury rate (4.75% for July 1, 2026 to December 31, 2026) when they pay late. To factor federal invoices, the funder usually needs an assignment of claims acknowledged by the contracting officer, which adds a week or two to setup. See factoring for government contractors and the prompt payment interest calculator.
What do District of Columbia lien and prompt pay rules mean for construction factoring?
Funders that factor construction receivables check lien and bond rights before they advance on a pay application, because those rights are what get an unpaid sub paid. Described generally:
- Mechanics lien deadline (private work, D.C. Code §40-301.01 et seq.): Notice of intent recorded in the land records during construction or within 90 days after the earlier of completion or termination of the project, with a copy to the owner by certified mail within 5 business days (§40-301.02). To enforce: Suit within 180 days after the notice of intent is recorded, plus a notice of pendency of action within 10 days of filing suit (§40-303.13).
- Preliminary notice: Not generally required.
- Private prompt pay (D.C. Code §27A-101 et seq.): owner to contractor: if the contract sets no dates, 15 days after the payment request, occupancy permit or owner possession, whichever is earliest; if it does, 7 days after the contract date; contractor to sub: 7 days after the contractor receives payment for the sub's work; late interest: 1.5% per month on undisputed late amounts, plus attorney fees to a prevailing claimant.
- Public projects (D.C. Code §§2-201.01 and 2-201.02): you cannot lien public property, so payment bonds take its place. Bond required: District construction contracts over $25,000. Claim notice: Subs and suppliers with no contract with the prime must give written notice to the prime within 90 days after last furnishing labor or materials.
- Read every lien waiver before you sign it, and ask counsel how a waiver signed before payment affects your rights. More in factoring for construction subcontractors.
What else should a District of Columbia business know?
- Federal agency receivables are assigned to a factor under the federal Assignment of Claims Act, not District law.
- DC's private prompt payment act gives subs a 7-day pass-through and 1.5% monthly interest, one of the shorter clocks in the region.
Questions people ask
Is invoice factoring legal in the District of Columbia?
Yes. Factoring is a sale of receivables and is legal in DC. The District has no commercial financing disclosure law and no registration rule for factors. The factor records a UCC-1 with the Recorder of Deeds and notifies your customers to pay it. For federal agency invoices, the assignment follows the federal Assignment of Claims Act.
Does DC require a disclosure for factoring deals?
No. The District has not adopted a commercial financing disclosure law, so there is no required form showing total cost or APR. Ask any factor for a written list of every fee, the advance rate, reserve terms and termination costs, and compare offers on total dollar cost.
Where do I search for UCC liens in DC?
DC UCC financing statements are recorded with the Office of the Recorder of Deeds, part of the Office of Tax and Revenue. Its online records search is run by a private vendor and requires registration or a subscription. Search your exact legal name, or order a search through a filing service, before you apply.
How fast do DC agencies have to pay contractors?
Under the Quick Payment Act, District agencies generally pay by the contract date or within 30 calendar days of a proper invoice, and owe an interest penalty after that, with a 15-day grace period for most items. Prime contractors must pay subs within 7 days of being paid or give written notice of why they are withholding.
How fast can a District of Columbia business get funded by factoring?
With a clean file (current AR aging, invoices, a clear UCC search and creditworthy customers), first funding commonly takes about one to three weeks, and later invoices usually fund within a day or two of verification. Federal receivables take longer because of the assignment of claims.
Sources
- D.C. Code §2-221.02, Quick Payment Act interest penalties
- D.C. Code §27A-102, private prompt payments to contractors
- D.C. Code §27A-104, private prompt payments to subcontractors
- D.C. Code §40-301.02, mechanics lien notice of intent
- D.C. Code §40-303.13, lien enforcement deadline
- D.C. Code §2-201.01, public contractor bonds
- D.C. Code §2-201.02, payment bond claims
- D.C. Code §28:9-501, UCC filing office
- DC Recorder of Deeds online public search
- Venable, state commercial financing disclosure laws (2026)
General information, not legal advice. Statutes and deadlines change and have exceptions; check the source or ask counsel before relying on one. Spot an error? Tell us and we will fix it.