Invoice Factoring in Louisiana: Rules, Liens, Payers

Louisiana rules at a glance, verified November 12, 2026. Disclosure law in effect. General information, not legal advice.
Disclosure law	In effect (since August 1, 2025)
Covers factoring?	Depends on structure
APR in disclosure?	No, dollar figures
UCC filing office	Any of the 64 Louisiana parish clerks of court (filing officers); the Secretary of State's Commercial Division maintains the statewide UCC master index but does not accept filings or perform searches
State agencies pay	State agencies owe a penalty if they fail, without reasonable cause, to pay within 90 days of the contract due date. On public works, progress payments are generally due within 45 days of a certified request and final payment within 45 days of a clear lien certificate.
Late-pay interest (state)	Under 39:1695, interest at the judicial interest rate (R.S. 13:4202(B)) from the 91st day after the due date. Section 38:2191 provides attorney fees and mandamus rather than a stated interest rate.
Lien deadline (private)	Generally 60 days after a notice of termination is filed, or after substantial completion or abandonment if none is filed; if the owner filed a timely notice of contract, 30 days after a notice of termination (or 6 months after substantial completion if none is filed). R.S. 9:4822.
Public payment bond	Contracts over $25,000 per project (over $250,000 in Ascension Parish); bond of at least 50% of the contract price

Who uses invoice factoring in Louisiana?

Louisiana receivables come from heavy industry and trade. Refineries and petrochemical plants line the Mississippi River corridor between Baton Rouge and New Orleans, and LNG export terminals in Cameron and Calcasieu parishes buy engineering, fabrication, maintenance and trucking from local contractors. The Port of New Orleans and the Port of South Louisiana move grain, steel and chemicals, which feeds logistics and marine services firms. Fort Polk, Barksdale Air Force Base and Naval Air Station Joint Reserve Base New Orleans create federal prime and subcontract work, and large hospital systems and state agencies are steady but slow payers for staffing and service vendors.

Industrial owners and EPC contractors often pay on long terms, and plant turnarounds and hurricane recovery create sudden spikes in billing that strain a contractor's cash. Offshore and oilfield service work rises and falls with energy prices. Construction subcontractors should note that Louisiana tightened its private prompt payment law effective August 1, 2026, with a 7-day pass-through rule and uncapped 1.5% monthly interest.

Industries that factor most: Petrochemicals and refining, LNG and energy construction, Oilfield and offshore services, Ports, maritime and logistics, Shipbuilding and marine fabrication, Healthcare services.
Metro areas: New Orleans, Baton Rouge, Shreveport, Lafayette, Lake Charles.
Federal installations that buy from local firms: Fort Polk, Barksdale Air Force Base, Naval Air Station Joint Reserve Base New Orleans.

What does Louisiana's commercial financing disclosure law require?

Revenue-based financing transaction disclosure, passed as HB 470 (2025), Act 198 of the 2025 Regular Session (La. R.S. 9:3137.10), has been in effect since August 1, 2025. It requires covered providers to give a written cost disclosure before a business signs.

Whether it reaches every kind of factoring transaction depends on the deal's structure; ask the provider which disclosure it will give you.

It does not require an APR. Expect dollar figures instead: amount financed, amount disbursed, total cost and payment terms.

Exemptions: The statute lists no exemptions and no maximum deal size; it applies only to revenue-based financing transactions, not loans.

Enforcement: The section contains no enforcement or penalty provision and does not authorize a state agency to adopt rules.

The law covers deals where a business sells or forwards a percentage of its sales, revenue or income and payments rise and fall with that volume; it requires one written disclosure (funds provided, funds disbursed, total repayment, total dollar cost, payment terms, prepayment costs) at or before closing. Whether a classic invoice factoring deal falls inside that definition is not addressed in the text, so confirm with counsel.

Compare offers side by side in the proposal decoder, and see every state's law in our disclosure law tracker.

How do UCC filings work in Louisiana?

Where UCC-1s are filed in Louisiana: Any of the 64 Louisiana parish clerks of court (filing officers); the Secretary of State's Commercial Division maintains the statewide UCC master index but does not accept filings or perform searches. Certified searches are ordered in writing from any parish clerk, and the Secretary of State sells an annual Direct Access subscription to the statewide database; UCC-3 amendments must go to the same parish as the original filing.

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 Louisiana 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 Louisiana pay?

Louisiana state agency deadline (La. R.S. 39:1695 (state agency vendor payments); La. R.S. 38:2191 (public works contracts)): State agencies owe a penalty if they fail, without reasonable cause, to pay within 90 days of the contract due date. On public works, progress payments are generally due within 45 days of a certified request and final payment within 45 days of a clear lien certificate. Late interest: Under 39:1695, interest at the judicial interest rate (R.S. 13:4202(B)) from the 91st day after the due date. Section 38:2191 provides attorney fees and mandamus rather than a stated interest rate. DOTD highway contracts have their own payment rules in R.S. 48:251.5. Act 822 of 2026 confirms the private prompt pay statute does not override R.S. 38:2191 on public contracts.

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 Louisiana 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, Louisiana Private Works Act, La. R.S. 9:4801 et seq.): Generally 60 days after a notice of termination is filed, or after substantial completion or abandonment if none is filed; if the owner filed a timely notice of contract, 30 days after a notice of termination (or 6 months after substantial completion if none is filed). R.S. 9:4822. To enforce: Suit against the owner within 1 year after filing the statement of claim (R.S. 9:4823); a notice of pendency of action must also be filed within 1 year to bind third parties.
Preliminary notice: Not generally required for subcontractors. Suppliers to subcontractors must send a notice of nonpayment to the owner and contractor within 75 days after the last day of the month of delivery when a notice of contract was filed; equipment lessors and design professionals have their own notice rules.
Private prompt pay (La. R.S. 9:2784, as amended by Act 822 of 2026): owner to contractor: generally 35 days after a written payment request for properly performed work (if the project is loan-funded, the later of 35 days or 5 days after the owner receives the loan proceeds); contractor to sub: 7 days after receipt of payment; late interest: 1.5% per month, with no cap, until paid.
Public projects (La. R.S. 38:2241 et seq. (Public Works Act)): you cannot lien public property, so payment bonds take its place. Bond required: Contracts over $25,000 per project (over $250,000 in Ascension Parish); bond of at least 50% of the contract price. Claim notice: File a sworn statement of the amount due with the public entity, and record it, within 45 days after recordation of acceptance of the work or notice of default (R.S. 38:2242(B)); suppliers to subcontractors must also send a notice of nonpayment within 75 days after the last day of the month of delivery.
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 Louisiana business know?

Louisiana is a civil-law state, but it adopted UCC Article 9; the unusual part is filing, which happens at parish clerks of court, with UCC searches run through any parish office.
Act 198 of 2025 also declares that amounts charged in a revenue-based financing deal are not interest, keeping those deals outside Louisiana usury rules.
Act 822 of 2026 rewrote private construction prompt pay as of August 1, 2026: 7-day pass-through to subs and 1.5% monthly interest with no cap.

Questions people ask

Is invoice factoring legal in Louisiana?

Yes. Louisiana's civil code roots do not block factoring; the state adopted UCC Article 9, which treats a sale of accounts receivable as a secured transaction that is perfected by filing a UCC-1. The factor files with any parish clerk of court and the filing becomes effective statewide. Contract terms, notice to your customers and any anti-assignment clauses in government contracts still matter, so read your factoring agreement closely.

Does Louisiana require a disclosure for factoring deals?

Louisiana's 2025 law (Act 198, R.S. 9:3137.10) requires a written disclosure for revenue-based financing, meaning deals where you sell a percentage of future sales and payments rise and fall with revenue. It requires no APR and has no exemptions or size cap. The statute does not mention invoice factoring, so a standard factoring deal may fall outside it. Ask your provider which disclosures it gives.

Where do I search for UCC liens in Louisiana?

Not at the Secretary of State. Louisiana UCC filings are made at the 64 parish clerks of court, which all feed a statewide index kept by the Secretary of State. For a certified search, send a written request to any parish clerk of court. Frequent searchers can buy an annual Direct Access subscription to the statewide database from the Secretary of State's Commercial Division.

How fast must a general contractor pay my subcontract invoices on a private Louisiana job?

Since August 1, 2026, a contractor must pay a subcontractor or supplier within 7 days of being paid, and the owner generally has 35 days from a proper payment request. Late amounts carry interest of 1.5% per month with no cap, and the prevailing party recovers attorney fees. These rules come from R.S. 9:2784 as amended by Act 822 of 2026; public projects follow separate rules.

How fast can a Louisiana 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

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.

Invoice factoring in Louisiana