Invoice Factoring

Invoice factoring is an alternative financing method in which businesses sell outstanding customer invoices to a third party company (known as a factoring company) in exchange for a cash advance. Once the borrower’s customers pay their invoices, the factor sends the remainder of the invoice value to the borrower, minus a small factoring fee.

Invoice factoring helps small businesses turn unpaid invoices into working capital and boost cash flow. This type of financing is popular amongst small businesses that struggle to get approval for more traditional types of financing due to having little or poor credit history.