FactorRoute: invoice factoring rules, math and rates

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US invoice factoring: state disclosure laws, UCC, prompt pay, liens, cost math, live prime and SOFR.

Finance & Payments Legal & Government

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      "updatedAt": "2026-11-12T17:33:32.37692Z",
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    "title": "FactorRoute: invoice factoring rules, math and rates",
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    "remotes": [
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    "description": "US invoice factoring: state disclosure laws, UCC, prompt pay, liens, cost math, live prime and SOFR."
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https://factorroute.com/mcp

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check_disclosure_requirement Read-only

For a business in a given state and a deal size in dollars, says whether that state's commercial financing disclosure law likely applies to an invoice factoring deal, based on the law's status, threshold and whether it covers accounts receivable purchases. Coverage also depends on exemptions (banks, low-volume providers) and on where the business is located, so treat it as a first check.

statestring, required

State where the business is located (name or code).

amount_usdnumber, required

Total facility or deal amount in US dollars.

Try it

Call this server's tools from your browser. Nothing to install.

https://factorroute.com/mcp

Requests go through mcptry because browsers can't call most MCP servers directly. Header values are sent to the server for that request only and are never stored or logged.

Tool list from our last check. Connect live to refresh it.

check_disclosure_requirement Read-only

statestring, required

State where the business is located (name or code).

amount_usdnumber, required

Total facility or deal amount in US dollars.

Tools (10)

check_disclosure_requirement

read-only

Argument	Type	Description
state*	string	State where the business is located (name or code).
amount_usd*	number	Total facility or deal amount in US dollars.

Input schema (JSON)

{
  "type": "object",
  "required": [
    "state",
    "amount_usd"
  ],
  "properties": {
    "state": {
      "type": "string",
      "description": "State where the business is located (name or code)."
    },
    "amount_usd": {
      "type": "number",
      "minimum": 0,
      "description": "Total facility or deal amount in US dollars."
    }
  }
}

check_factoring_fit

A first-pass fit check, the same logic as FactorRoute's "Do I qualify?" tool: who pays the invoices, industry, monthly invoicing, facility size, days to pay, the situation (bank declined, MCA refinance, switching factors...) and existing liens. Returns the likely funding route (express to $500K, direct to $3MM, network placement $3MM to $25MM, specialty or outside), why, what to expect and the documents to gather.

read-only

Argument	Type	Description
state	string	Two-letter state code.
industry	string	One of: staffing-agencies, government-contractors, construction-subcontractors, manufacturers, wholesale-distribution, aerospace-defense, business-services, marine-services, oilfield-services, textile-apparel, trucking-freight, medical-insurance, other.
customers*	string
situation	string
days_to_pay	string
encumbrances	array
facility_size*	string
monthly_invoicing	string

Input schema (JSON)

{
  "type": "object",
  "required": [
    "customers",
    "facility_size"
  ],
  "properties": {
    "state": {
      "type": "string",
      "description": "Two-letter state code."
    },
    "industry": {
      "type": "string",
      "description": "One of: staffing-agencies, government-contractors, construction-subcontractors, manufacturers, wholesale-distribution, aerospace-defense, business-services, marine-services, oilfield-services, textile-apparel, trucking-freight, medical-insurance, other."
    },
    "customers": {
      "enum": [
        "b2b",
        "government",
        "consumer",
        "mixed"
      ],
      "type": "string"
    },
    "situation": {
      "enum": [
        "bank-declined",
        "line-of-credit-called",
        "covenant-default",
        "mca-refinance",
        "switch-factoring-companies",
        "growth-outpacing-credit",
        "seasonal-cash-flow",
        "slow-paying-customers",
        "startup-factoring",
        "tax-liens",
        "bad-credit",
        "customer-concentration",
        "none"
      ],
      "type": "string"
    },
    "days_to_pay": {
      "enum": [
        "under-30",
        "30-45",
        "45-60",
        "60-90",
        "over-90"
      ],
      "type": "string"
    },
    "encumbrances": {
      "type": "array",
      "items": {
        "enum": [
          "tax-liens",
          "existing-factor",
          "mca",
          "sba-loan"
        ],
        "type": "string"
      }
    },
    "facility_size": {
      "enum": [
        "under-50k",
        "50k-500k",
        "500k-3mm",
        "3mm-25mm",
        "over-25mm"
      ],
      "type": "string"
    },
    "monthly_invoicing": {
      "enum": [
        "under-25k",
        "25k-100k",
        "100k-500k",
        "500k-2mm",
        "2mm-10mm",
        "over-10mm"
      ],
      "type": "string"
    }
  }
}

compare_mca_vs_factoring

Estimated APR of a merchant cash advance from its funded amount, factor rate, fees and term, next to the cost of raising the same cash by factoring invoices. Same math as FactorRoute's MCA vs. factoring tool (IRR of the payment schedule, the method state disclosure rules use to estimate APR).

read-only

Argument	Type	Description
funded*	number	MCA amount funded, dollars.
frequency	string	Payment frequency. Default daily.
days_to_pay	number	How long your customers take to pay. Default 45.
factor_rate*	number	Factor rate, e.g. 1.35.
term_months*	number	Months to pay back.
origination_pct	number	Fees withheld, percent of funded. Default 0.
factoring_fee_pct_per_30_days	number	Factoring fee to compare. Default 2.5.

Input schema (JSON)

{
  "type": "object",
  "required": [
    "funded",
    "factor_rate",
    "term_months"
  ],
  "properties": {
    "funded": {
      "type": "number",
      "minimum": 1000,
      "description": "MCA amount funded, dollars."
    },
    "frequency": {
      "enum": [
        "daily",
        "weekly"
      ],
      "type": "string",
      "description": "Payment frequency. Default daily."
    },
    "days_to_pay": {
      "type": "number",
      "maximum": 120,
      "minimum": 1,
      "description": "How long your customers take to pay. Default 45."
    },
    "factor_rate": {
      "type": "number",
      "maximum": 3,
      "minimum": 1,
      "description": "Factor rate, e.g. 1.35."
    },
    "term_months": {
      "type": "number",
      "maximum": 36,
      "minimum": 1,
      "description": "Months to pay back."
    },
    "origination_pct": {
      "type": "number",
      "maximum": 20,
      "minimum": 0,
      "description": "Fees withheld, percent of funded. Default 0."
    },
    "factoring_fee_pct_per_30_days": {
      "type": "number",
      "maximum": 10,
      "minimum": 0,
      "description": "Factoring fee to compare. Default 2.5."
    }
  }
}

define_factoring_term

Plain-English definition of an invoice factoring, AR finance, MCA, SBA, UCC, construction or government contracting term (advance rate, recourse, notification, reserve, UCC-1, assignment of claims, retainage, intercreditor...).

read-only

Argument	Type	Description
term*	string	The term to define.

Input schema (JSON)

{
  "type": "object",
  "required": [
    "term"
  ],
  "properties": {
    "term": {
      "type": "string",
      "description": "The term to define."
    }
  }
}

estimate_factoring_cost

Cost of factoring one invoice (or one month of invoices): cash advanced, fees, rebate, cost as a percent of the invoice and the effective annual rate on the cash actually received, next to a bank line. Same math as FactorRoute's factoring cost calculator. Fee is a flat rate per 30 days billed in blocks of increment_days (30, 15, 10 or 1 for daily proration).

read-only

Argument	Type	Description
bank_apr_pct	number	Bank line APR to compare. Default 10.
monthly_fees	number	Recurring monthly fees in dollars (service, lockbox). Default 0.
increment_days	number	Billing block in days. Default 30.
invoice_amount*	number	Invoice face value in dollars.
advance_rate_pct	number	Advance rate, percent. Default 85.
days_outstanding*	number	Days until the customer pays.
fee_pct_per_30_days*	number	Discount fee, percent per 30 days (e.g. 2.5).

Input schema (JSON)

get_benchmark_rates

Today's bank prime loan rate (Federal Reserve H.15), SOFR and 30-day average SOFR (New York Fed) and the fed funds target range, with as-of dates and sources. These price prime-plus factoring and asset-based lines; most flat factoring fees do not move with them.

read-only

No arguments.

Input schema (JSON)

{
  "type": "object",
  "properties": {}
}

get_state_factoring_rules

Everything FactorRoute has verified about invoice factoring in one US state or DC: commercial financing disclosure law (status, threshold, citation, whether it covers factoring, APR, registration), where UCC liens are filed and searched, how fast state agencies must pay vendors and the late-payment interest, private construction prompt pay, mechanics lien and payment bond deadlines, the main industries and payers, and sources. Use for "is factoring regulated in X", "where do I search UCC liens in X", "how long does X state take to pay contractors".

read-only

Argument	Type	Description
state*	string	State name or two-letter code, e.g. "TX" or "New York". DC is accepted.

Input schema (JSON)

{
  "type": "object",
  "required": [
    "state"
  ],
  "properties": {
    "state": {
      "type": "string",
      "description": "State name or two-letter code, e.g. \"TX\" or \"New York\". DC is accepted."
    }
  }
}

list_disclosure_law_states

Every US state whose commercial financing disclosure law is in effect or enacted, with dollar threshold, effective date, citation, whether it reaches factoring (accounts receivable purchase) transactions, whether an APR is required, and any provider registration. Use for "which states regulate factoring" or "which states require disclosures on business loans and MCAs".

read-only

No arguments.

Input schema (JSON)

{
  "type": "object",
  "properties": {}
}

prompt_payment_interest

Interest a federal agency owes on a late invoice under the Prompt Payment Act at the current Treasury rate (simple daily interest, added to principal every 30 days), or, for a state, the state's prompt payment rule with the interest at a rate you supply. Use for government contractors waiting on agency payments.

read-only

Argument	Type	Description
amount*	number	Invoice amount in dollars.
days_late*	number	Days past the payment due date.
jurisdiction*	string	"federal" or a state name or code.
annual_rate_pct	number	Optional: annual rate to use (needed for most states).

Input schema (JSON)

{
  "type": "object",
  "required": [
    "amount",
    "days_late",
    "jurisdiction"
  ],
  "properties": {
    "amount": {
      "type": "number",
      "minimum": 1,
      "description": "Invoice amount in dollars."
    },
    "days_late": {
      "type": "number",
      "maximum": 3650,
      "minimum": 1,
      "description": "Days past the payment due date."
    },
    "jurisdiction": {
      "type": "string",
      "description": "\"federal\" or a state name or code."
    },
    "annual_rate_pct": {
      "type": "number",
      "maximum": 30,
      "minimum": 0,
      "description": "Optional: annual rate to use (needed for most states)."
    }
  }
}

search_factoring_guides

Find FactorRoute's guides, situation pages, industry pages, state pages and tools for a question (e.g. "line of credit called", "factor buyout", "staffing payroll", "tax lien", "government contractor"), with each page's short answer and URL.

read-only

Argument	Type	Description
limit	number	Default 5.
query*	string	What the user wants to know.

Input schema (JSON)

{
  "type": "object",
  "required": [
    "query"
  ],
  "properties": {
    "limit": {
      "type": "number",
      "maximum": 10,
      "minimum": 1,
      "description": "Default 5."
    },
    "query": {
      "type": "string",
      "description": "What the user wants to know."
    }
  }
}

FactorRoute: invoice factoring rules, math and rates

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check_disclosure_requirement Read-only

FactorRoute: invoice factoring rules, math and rates

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check_disclosure_requirement Read-only

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