The Ultimate Guide to Invoice Factoring: Boosting Cash Flow for Small Businesses

Invoice factoring is a financial transaction where a company sells its accounts receivable (invoices) to a third-party financial company, known as a factor, at a discount. The factor then collects payments from the customers on those invoices. It provides immediate cash flow to the business that would otherwise have to wait for the payment terms on those invoices, albeit at a lower amount than the actual invoice value due to the discount.