Invoice Factoring: Financing Your Business Without Debt- Really!
Aug 12, 2008 in General, Business, Finance
Invoice factoring allows you to turn your slow paying invoices from good customers into immediate cash. It is a very simple transaction in which you trade an invoice - “almost cash” - for actual cash. Basically, the factoring company provides financing solely on the power of your soon to be paid invoices.
Provided that you have good customers, you can repeat this process for every invoice you have, almost indefinitely. If you sell products to good credit worthy customers, a factoring company will gladly purchase your invoices. There are no limits, except how much you can sell.
One important thing to know about factoring is that it doesn’t generate debt. The factor does not loan you money for your invoices. It buys them outright from you at a small discount. Since factoring is not a loan, qualifying for it is easy and your financial statements look cleaner. You just need a well-run business and great customers.



