invoice factoring

Invoice factoring is a financial arrangement where a business sells its outstanding invoices to a third party, known as a factoring company. This allows the business to receive immediate cash instead of waiting for customers to pay their bills. The factoring company then collects the payments directly from the customers. This practice helps businesses manage cash flow, cover expenses, and invest in growth without taking on debt. In return for the service, the factoring company takes a fee, which is typically a percentage of the invoice amount.