What is Factoring

Factoring is the act of buying or selling accounts receivables at a discount. The company which buys the accounts receivables is known as the factor.

Factoring allows a business to have immediate cash on hand to manage its operations more efficiently.

Factoring is converting the accounts receivable of the business into cash by selling those invoices to a factoring company for a discount.

Why Use Factoring

Availability of cash on a regular basis

Factoring services are normally less expensive than maintaining an in-house credit and collection department

Factoring provides working capital to help business solve their cash flow needs.

Working with a factoring company is better than dealing with a bank in that your business is evaluated based on the strengths of its accounts receivables rather than your businesses financial statements.

Factoring is not a loan. No debt is incurred to you.