| Disclosure law | None |
|---|---|
| UCC filing office | Washington State Department of Licensing, UCC section (Olympia) |
| State agencies pay | 30 days after receipt of a properly completed invoice or of the goods or services, whichever is later |
| Late-pay interest (state) | 1% per month (minimum $1 per month) on late payments |
| Lien deadline (private) | Record the lien in the county where the property sits within 90 days after the claimant last furnished labor or materials, and send a copy to the owner within 14 days of recording |
| Public payment bond | Bond required on public works contracts; on contracts of $150,000 or less the contractor may elect to have the agency retain 10% instead |
Who uses invoice factoring in Washington?
Washington's receivables come from aerospace, technology, ports and logistics, agriculture, defense and construction. Boeing's plants in Everett and Renton buy machined parts, tooling and engineering services from a deep supplier base. Microsoft and Amazon generate staffing, facilities and construction invoices around Seattle. The Northwest Seaport Alliance ports of Seattle and Tacoma move containers for distributors and 3PLs. Joint Base Lewis-McChord, Naval Base Kitsap and Fairchild Air Force Base support defense contractors, and the Department of Energy's Hanford site keeps Tri-Cities engineering and environmental firms busy.
Aerospace suppliers commonly wait 60 days or more on large customers and can be hit by production rate changes. Eastern Washington's apple, cherry and wheat harvests create seasonal receivables from packers and shippers. Public agencies generally must pay within 30 days, but private construction has no statutory prompt pay clock, so subs depend on contract terms. Hanford and federal work bill through prime contractors on milestone schedules.
- Industries that factor most: Aerospace manufacturing, Technology services, Ports and logistics, Agriculture and food processing, Construction, Defense and federal contracting.
- Metro areas: Seattle-Tacoma, Spokane, Vancouver, Tri-Cities, Bellingham.
- Federal installations that buy from local firms: Joint Base Lewis-McChord, Naval Base Kitsap, Naval Station Everett, Naval Air Station Whidbey Island, Fairchild Air Force Base, Hanford Site.
Does Washington regulate invoice factoring?
Washington 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 Washington?
Where UCC-1s are filed in Washington: Washington State Department of Licensing, UCC section (Olympia). UCC filings in Washington go to the Department of Licensing, not the Secretary of State; paper searches use Form UCC-11.
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 Washington 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 Washington pay?
Washington state agency deadline (RCW 39.76): 30 days after receipt of a properly completed invoice or of the goods or services, whichever is later. Late interest: 1% per month (minimum $1 per month) on late payments. A public body withholding payment must give written notice within 8 working days. On public works, primes and subs must pay their subs within 10 days after receiving payment (RCW 39.04.250).
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 Washington 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, RCW 60.04): Record the lien in the county where the property sits within 90 days after the claimant last furnished labor or materials, and send a copy to the owner within 14 days of recording. To enforce: Suit within 8 months after recording, with the owner served within 90 days of filing.
- Preliminary notice: Suppliers, equipment lessors and subs without a direct contract with the owner generally must give a notice of right to claim a lien; it covers only materials or equipment furnished from 60 days before the notice (10 days on new single-family homes). Contractors on most residential and small commercial jobs must give the model disclosure statement before starting.
- Private prompt pay: we could not verify a general private construction prompt payment law in Washington; your subcontract's pay terms control.
- Public projects (RCW 39.08): you cannot lien public property, so payment bonds take its place. Bond required: Bond required on public works contracts; on contracts of $150,000 or less the contractor may elect to have the agency retain 10% instead. Claim notice: Suppliers to subs must notify the prime within 10 days after first delivery; claimants file written notice with the public body within 30 days after completion and acceptance of the work. A separate retainage claim under RCW 60.28 is also available.
- 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 Washington business know?
- UCC filings and searches in Washington run through the Department of Licensing, so a factor's lien search here is not done at the Secretary of State.
- On Washington public works, unpaid subs and suppliers can also claim against the retained percentage under RCW 60.28, a second layer of protection funders weigh alongside the bond.
Questions people ask
Is invoice factoring legal in Washington?
Yes. Factoring is a sale of accounts receivable under Article 9 of the Uniform Commercial Code as adopted in Washington. The factor perfects its interest with a UCC-1 filed with the Washington Department of Licensing. Washington has no special licensing or disclosure law for business factoring, so the contract governs.
Does Washington require a disclosure for factoring deals?
No. As of November 2026 Washington has no commercial financing disclosure law, so there is no required disclosure form or APR estimate for factoring or merchant cash advances. Compare offers in total dollars over a year, and read the recourse window, minimum volume, term and termination notice before you sign.
Where do I search for UCC liens in Washington?
Use the Washington Department of Licensing's online UCC system, which files and searches records electronically; paper searches use Form UCC-11. Search your exact legal name. Any lender with a blanket lien covering accounts must release or subordinate before a factor can take first position.
How fast must Washington public agencies pay, and what about private jobs?
Under RCW 39.76, public agencies generally must pay within 30 days after a proper invoice or delivery, whichever is later, with 1% per month interest on late payments. On public works, contractors must pay subs within 10 days after being paid. Private construction has no statutory deadline, so contract terms control.
How fast can a Washington 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
- Levelset, Washington prompt payment FAQs
- Levelset, Washington mechanics lien FAQs
- Levelset, Washington bond claim FAQs
- Washington Department of Licensing, UCC forms
- Venable, State commercial financing disclosure laws (March 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.