Reserve

The portion of the invoice held back until the customer pays and fees are deducted.

Why it matters

Reserve is the difference between 100% and the advance rate. Delays in reserve release due to disputes, chargebacks, or cross-collateralization directly reduce working capital.

Related terms

Related article: What is invoice factoring?

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.