invoice factoring - what is it?
What is Invoice Factoring
Invoice factoring is a financial service used by businesses to convert their invoices into upfront cash. It involves a business selling its accounts receivable (invoices) to a third-party company at a discount in exchange for immediate cash.
Invoice factoring is a popular financing option for businesses with short-term cash flow needs. It provides immediate access to cash that would otherwise take 30-90 days to collect from customers. Businesses can use the cash to expand their operations, pay employees, and invest in new equipment and technology.
Invoice factoring is advantageous for businesses because it is a low-cost and fast alternative to traditional financing. It also helps businesses manage their cash flow more effectively and improve their credit rating. It is an increasingly popular financing option for businesses of all sizes. It is a fast and convenient way to access cash and bridge cash flow gaps.