What is reserve?
Reserve: The portion of an invoice held back until the customer pays.
How it works
The reserve is invoice face value minus the advance. When your customer pays the factor, the reserve is released to you, less the factoring fee. Reserves protect the factor against short-pays, disputes, and chargebacks.
Where you will run into it
Reserve comes up most often in invoice factoring conversations. See how invoice factoring works, including real cost ranges and timelines.
Related terms
Reserve questions
The portion of an invoice held back until the customer pays.
The reserve is invoice face value minus the advance. When your customer pays the factor, the reserve is released to you, less the factoring fee. Reserves protect the factor against short-pays, disputes, and chargebacks.
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