Invoice Factoring

    Funding Option


    Invoice factoring is a way for businesses to raise money by selling invoices to a factoring company at a discount. Factoring usually includes credit control services and helps companies release cash from their debtor book. Here’s everything you need to know about invoice factoring.

    Reference –

    Go Cardless


    Invoice factoring is a type of invoice finance where you “sell” some or all of your company’s outstanding invoices to a third party as a way of improving your cash flow and revenue stability. A factoring company will pay you most of the invoiced amount immediately, then collect payment directly from your customers. There are benefits and disadvantages to invoice factoring, which we’ll cover in this article.

    Invoice factoring is also referred to as accounts receivable factoring or debt factoring.

    Reference –

    Velo Trade


    Invoice factoring is a financing process in which a business sells its unpaid invoices to a third-party company, called a factoring company. When an invoice is sold, the third-party company pays the business a percentage of the total amount originally charged to the client and usually takes full responsibility for collecting the payment from the buyer. This transaction allows businesses to get quick access to cash before the clients pay for the goods or services received, allowing them to re-invest that cash right away.

    Reference –

    Market Finance 


    Invoice factoring is a way for businesses to fund cash flow by selling their invoices to a third party (a factor, or factoring company) at a discount. Invoice factoring can be provided by independent finance providers, or by banks.

    Around 45,000 businesses in the UK currently use factoring ( ABFA as at Q3 2015 )

    Reference –

    Nerd Wallet


    As a small business owner, you can turn your unpaid customer invoices into fast cash with invoice factoring. This financing option is best for business owners whose customers are other businesses. Because these customers typically don’t pay for goods or services right away, invoice factoring can provide immediate cash for business owners to keep paying employees or other expenses.

    Here’s what you need to know about invoice factoring.

    Reference –

    Altline Sobanco


    Most invoices are set to payment terms of 30 to 90 days, meaning that from the day an invoice is sent to your customer, you’re unlikely to see that money for at least a month, if not longer. These long payment cycles put many small business owners in a constant cash crunch, making it hard to keep up with critical expenses like payroll, utilities or inventory. That likely prevents you from investing in growth opportunities or maintaining day-to-day operations that keep everything on track.

    Reference –

    Trade Finance Global


    Invoice factoring allows a business to grow and unlock cash that is tied up in future income, so that it can re-invest that capital and time is not spent collecting payments. Thus, there is a removal of the unpredictable nature of waiting for payment so that revenue can be booked and capital is then available to spend.

    Gateway Commercial Finance


    Invoice factoring (or accounts receivable factoring) is a financial transaction in which a business sells its outstanding invoices to a factoring company at a discount. Businesses that offer goods or services to other businesses (or the government) use factoring to access immediate cash flow.

    Reference –



    Businesses can gain access to a range of external funding options in the Indian financial market. In the last ten years, the number of institutional sources of financing has also increased significantly. Businesses can thus resort to several financiers like investors, banks, NBFCs and fintech companies today to meet their funding needs.


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