Factoring is the purchase of accounts receivable at a discount. That is, a factor pays a client immediate cash for the client’s invoices for which payment is due in the future.
Factoring is not a loan with interest due, but the purchase of an asset at a discounted rate from the asset's face value. Therefore, factoring clients are not paying an interest rate as they would for a bank loan, but a discount, as they would if they were giving terms to a customer for early payment.
Factoring is not a loan with interest due, but the purchase of an asset at a discounted rate from the asset's face value. Therefore, factoring clients are not paying an interest rate as they would for a bank loan, but a discount, as they would if they were giving terms to a customer for early payment.
What Is Factoring?
Factoring 101
How Does This Work?
Here is a diagram of how factoring typically works.
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Specialists in
Small Business Factoring
Small Business Factoring
Member,
International Factoring
Association
International Factoring
Association
877 620-3699
1% starting rate
No application or set up fees
No monthly minimum charges
No long-term contracts
No application or set up fees
No monthly minimum charges
No long-term contracts
“Bills don’t stop coming in and now I can pay them stress-free.”
“If more companies knew how easy and how beneficial it is to factor when needed, they wouldn’t sweat it as to when a check comes in.”