Invoice Factoring or Accounts Receivable Factoring
Answer:
Companies facing cash-flow problems and slow-paying customers may sell their invoices or accounts receivable to specialized companies called factors. The factor company advances most of the invoice amount (70-90%), after checking out the credit-worthiness of the billed customer. When the invoices are paid, the factor remits the balance, minus a transaction (or factoring) fee. Resources:
- How to use Factoring for cash flow http://guides.wsj.com/small-business/funding/how-to-use-factoring-for-cash-flow/
- All about factoring http://www.entrepreneur.com/encyclopedia/factoring
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