| Disclosure law | None |
|---|---|
| UCC filing office | Bureau of Conveyances, Department of Land and Natural Resources (HRS §490:9-501) |
| State agencies pay | No later than 30 calendar days after receipt of a proper statement or satisfactory delivery or performance, whichever is later |
| Late-pay interest (state) | Prime rate (as posted in the Wall Street Journal) plus 2%, from the 30th day |
| Lien deadline (private) | Application for lien filed in circuit court no later than 45 days after the date of completion of the improvement (HRS §507-43); a court hearing on probable cause follows |
| Public payment bond | Construction contracts over $25,000 |
Who uses invoice factoring in Hawaii?
Hawaii's B2B receivables are shaped by the military and by tourism. Joint Base Pearl Harbor-Hickam, Pearl Harbor Naval Shipyard, Schofield Barracks, Marine Corps Base Hawaii and the Pacific Missile Range Facility on Kauai buy construction, ship repair, facilities and IT services. The state and four counties pay a large contractor base under a 30-day rule. Hotel and resort operators buy food, linen, maintenance and staffing services, and hospital systems such as Queen's Health Systems and Hawaii Pacific Health pay medical staffing and supply vendors. Honolulu Harbor is the main gateway for almost everything sold in the islands.
Because nearly all goods arrive by ship, distributors carry inventory longer than mainland peers before a buyer pays. Federal and state payers generally pay within 30 days of a proper invoice, but approval chains add time. Tourism demand rises in winter and summer, and construction subs on public jobs must be paid within 10 days of the prime receiving funds.
- Industries that factor most: Defense and military construction, Ship repair and marine services, Hospitality and tourism vendors, Food and goods distribution, Healthcare staffing, Construction subcontracting.
- Metro areas: Honolulu, Hilo, Kahului-Wailuku, Kailua-Kona, Lihue.
- Federal installations that buy from local firms: Joint Base Pearl Harbor-Hickam, Pearl Harbor Naval Shipyard, Schofield Barracks, Marine Corps Base Hawaii, Pacific Missile Range Facility.
Does Hawaii regulate invoice factoring?
Hawaii 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 Hawaii?
Where UCC-1s are filed in Hawaii: Bureau of Conveyances, Department of Land and Natural Resources (HRS §490:9-501). Hawaii has no Secretary of State; the Bureau of Conveyances handles UCC filings, and an official UCC11 search costs $25 per request plus $5 per creditor found.
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 Hawaii 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 Hawaii pay?
Hawaii state agency deadline (HRS §103-10): No later than 30 calendar days after receipt of a proper statement or satisfactory delivery or performance, whichever is later. Late interest: Prime rate (as posted in the Wall Street Journal) plus 2%, from the 30th day. Applies to state agencies and counties. On public construction, contractors must pay subs within 10 days of receiving payment, with a 1.5% monthly penalty for late payment (HRS §103-10.5).
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 Hawaii 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, HRS §507-41 et seq.): Application for lien filed in circuit court no later than 45 days after the date of completion of the improvement (HRS §507-43); a court hearing on probable cause follows. To enforce: Within 3 months after the court enters the order directing the lien to attach.
- Preliminary notice: Not generally required.
- Private prompt pay (HRS §444-25): contractor to sub: 10 days after the later of a sub's invoice with required backup or the contractor's receipt of payment from the owner; late interest: 1.5% per month from the date payment is due.
- Public projects (HRS §103D-324): you cannot lien public property, so payment bonds take its place. Bond required: Construction contracts over $25,000. Claim notice: Written notice to the contractor and surety within 90 days after last furnishing labor or materials; suit within 1 year.
- 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 Hawaii business know?
- A Hawaii mechanics lien does not attach until a circuit court finds probable cause, so lien rights are slower and costlier to use than in most states.
- Search the Bureau of Conveyances, not a Secretary of State, for UCC filings against a Hawaii business.
Questions people ask
Is invoice factoring legal in Hawaii?
Yes. Factoring is a sale of receivables and is legal in Hawaii. The state has no commercial financing disclosure law and no registration rule for factors. The factor files a UCC-1 with the Bureau of Conveyances and notifies your customers to pay it. For federal customers such as Pearl Harbor commands, the assignment follows the federal Assignment of Claims Act.
Does Hawaii require a disclosure for factoring deals?
No. Hawaii has not adopted a commercial financing disclosure law, so there is no state form showing total cost or APR. Ask any factor for a written list of every fee, the advance rate, reserves, term and termination costs, and compare offers on total dollar cost over your real collection time.
Where do I search for UCC liens in Hawaii?
UCC filings are handled by the Bureau of Conveyances in the Department of Land and Natural Resources, because Hawaii has no Secretary of State. You can search recorded documents online through the Bureau's portal or request an official UCC11 search for $25 plus $5 per creditor found. Search your exact legal name before you apply.
How fast must Hawaii state and county agencies pay?
Hawaii law generally requires state agencies and counties to pay within 30 calendar days of a proper statement or satisfactory delivery, whichever is later. After that, the vendor is owed interest at the prime rate plus 2%. Disputes, labor disputes and some federal-funding conditions pause the clock.
How fast can a Hawaii 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
- HRS §103-10, payment for goods and services
- HRS §103-10.5, prompt payment on public contracts
- HRS §103D-324, performance and payment bonds
- HRS §507-43, mechanics lien application
- HRS §444-25, contractor payment to subcontractors
- HRS §490:9-501, UCC filing office
- Hawaii Bureau of Conveyances FAQs
- Levelset, Hawaii mechanics lien FAQs
- 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.