Factoring is a type of financing that lets business owners receive cash quickly by selling invoices to a third party (called a factor) in exchange for a portion of the invoice’s face value. Factoring can provide businesses with quick liquidity to covercash flow needs. The factor typically charges a commission for providing factoring services, but in some cases the fee can be worth it if access to the quick cash can help a business grow or survive a short-time cash flow crisis.
