Accounts receivable financing, also known as “factoring,” is a practice in which a business sells its invoices to a third-party financial company to collect upon.
Accounts receivable financing, also known as “factoring,” is a practice in which a business sells its invoices to a third-party financial company to collect upon.
Some businesses choose to finance their accounts receivable to obtain cash more quickly than they would if they waited for their customers to pay within terms (usually 30-60 days). Though factoring companies can typically advance a business cash for its invoices within 24 hours, it often comes at a steep fee. Still, factoring is a viable option for many businesses that need funds immediately to continue operations.
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