If your customers pay on 30, 60, or 90-day terms, your cash can be tied up in invoices exactly when you need it to run the business. Invoice factoring is built for that gap.
How it works
You sell an outstanding invoice to a factor at a discount and receive most of its value up front. The factor then collects from your customer and remits the remainder to you, less its fee. You get working cash now instead of waiting for the payment terms to run out.
What makes it different
Because repayment comes from your customer paying their invoice, the factor often weighs your customers' credit as heavily as your own. That means factoring can be available to newer businesses that have strong customers but a short credit history.
When it fits
Factoring shines for businesses with reliable B2B invoices and a timing mismatch between paying suppliers and getting paid. It is less relevant if you are paid at the point of sale.
See whether factoring fits your profile with Find Your Funding Fit.