Invoice factoring in South Carolina

Who factors invoices in South Carolina?

South Carolina factoring is driven by manufacturing supply chains and the businesses that serve them. In the Upstate, a deep supplier base feeds the BMW plant near Spartanburg and other auto and tire makers. In the Lowcountry, Boeing’s North Charleston operation and the Volvo plant near Ridgeville anchor aerospace and auto supply chains. The Port of Charleston and the inland port at Greer move their freight.

Federal payers are a second engine: Fort Jackson, Shaw Air Force Base, Joint Base Charleston, the Marine Corps installations around Beaufort, and the Department of Energy’s Savannah River Site near Aiken. Hospital systems and state agencies round out the list.

All of these customers tend to pay reliably and slowly. Factoring lets the smaller companies that serve them keep up with payroll and materials. We work with businesses across South Carolina, from Greenville and Spartanburg to Columbia, Charleston and the Grand Strand.

How do South Carolina’s prompt payment rules affect cash flow?

South Carolina’s Prompt Payment Act (S.C. Code 29-6-10 through 29-6-50) generally requires an owner to pay a contractor the undisputed amount of a pay request within 21 days of receiving it, and a contractor to pay its subs within 7 days of receiving each periodic or final payment. The Act’s definitions can reach public owners as well as private ones, but public contracts may also carry procurement rules of their own, so check yours.

Late payments can carry interest of 1% per month, but only if the payee notified the payer of the statute when it requested payment. Check whether your contract changes the default terms.

For non-construction purchases, state agencies generally must send payment vouchers to the Comptroller General within 30 work days of accepting the goods or services and receiving a proper invoice under section 11-35-45. Interest of up to 15% a year may apply after that.

Put a line on every pay request citing the Prompt Payment Act. Interest only runs if you gave notice, and the line costs nothing.

What do South Carolina lien rules mean for construction factoring?

South Carolina’s mechanic’s lien clock is short and unforgiving, so a funder will check it before advancing on any private-job pay application. A claimant generally must serve the owner and file a sworn statement of lien within 90 days after its own last furnishing of labor or materials. Then it must start a suit and file a notice of pending action within six months of that same last furnishing date, not six months from the filing.

Miss either step and the lien is generally dissolved, which turns a secured receivable into an unsecured one. A funder will ask for your last-furnishing dates by job, your lien filings if any, and the waivers you have signed.

Public projects work differently. You cannot lien public property; instead, contractors on state construction contracts furnish payment bonds. A claimant without a direct contract with the bonded contractor generally must give written notice within 90 days of last furnishing. Have construction counsel confirm deadlines for your tier. See construction subcontractors for how funders treat retainage.

Where are UCC liens filed in South Carolina?

The South Carolina Secretary of State is the central filing office for UCC financing statements on business collateral such as receivables, and filings and searches can be done online. Fixture filings and certain real-estate-related collateral are filed at the county level instead.

A funder searches the Secretary of State index for your exact legal name before it funds. Existing liens on accounts receivable, whether from a bank, an SBA lender, an equipment lessor or an MCA provider, must be released, subordinated or covered by an intercreditor agreement before the funder can buy your invoices.

If you are switching from another factor, the old factor’s UCC-1 stays until it files a termination, which it will do after its payoff is met. Our factor buyout page explains how that handoff works.

Does South Carolina have a commercial financing disclosure law?

No. As of this update, South Carolina has not enacted a commercial financing disclosure law like the ones in Georgia and Florida. A factoring offer in South Carolina does not have to include a standardized cost disclosure.

That puts the comparison work on you. Ask each funder for the total dollar cost on your expected volume, the advance amount, every fee outside the discount rate, the contract term and the termination fee, all in writing. Our factoring cost calculator turns a fee schedule into a dollar figure.

Which South Carolina industries are the best fit?

The best fits are businesses with creditworthy commercial or government customers and invoices that sit 30 to 90 days.

• Auto and tire suppliers in the Upstate billing tier-one suppliers and OEMs on net 45 to net 90. See manufacturers.
• Aerospace vendors serving Lowcountry aerospace programs, often with quality holds that stretch payment. See aerospace and defense suppliers.
• Government contractors at military installations and the Savannah River Site. See government contractors.
• Staffing agencies placing workers in plants, warehouses and hospitals on weekly payroll. See payroll funding.
• Construction subcontractors on industrial, port and public projects.
• Wholesale and distribution businesses moving goods through Charleston and Greer.

What should South Carolina suppliers know before taking on a big OEM program?

Before you accept a large OEM or tier-one program, model the cash it will consume before the first invoice pays. A net 75 customer means roughly two and a half months of payroll, materials and tooling paid out before any money comes back, and that gap grows with every month of ramp.

Check the customer’s supplier terms for anti-assignment language and for supply chain finance programs. Some large manufacturers run their own early-pay programs at a discount; a funder will want to know if the customer could redirect payment. Under UCC 9-406, terms that restrict assigning receivables are generally ineffective against a factor, but customers can still push back operationally, so find them before closing, not after.

Then set up the facility at award. Underwriting takes about one to three weeks, and the first funding should land before the first big payroll, not after the first late payment. Run the numbers in the cash gap calculator with your real terms.

What does factoring cost in South Carolina?

South Carolina factoring fees commonly run roughly 1% to 5% of invoice value per 30 days, consistent with national ranges. The price is set mostly by your customers’ credit, your monthly volume and how long your invoices stay out.

A supplier billing a large OEM $250,000 a month on net 60 will usually price better per dollar than a sub billing $40,000 a month to five small builders. Advance rates commonly fall between 70% and 90%, with retainage on construction jobs excluded until it is released.

Step by step

1. Search the Secretary of State UCC indexSearch your exact legal name and list every lender with a lien on receivables.
2. Pull an aging by customerShow who owes you, how much and how long each customer takes to pay.
3. Document construction jobsLast-furnishing dates, lien filings, bond information on public jobs, and signed waivers.
4. Request written dollar costsWith no state disclosure law, ask each funder for total cost, advance and exit terms in writing.
5. Close and notify customersCustomers receive a notice of assignment; you draw advances as you invoice.