A form of financing where a business sells receivables to access cash sooner.
For example, a staffing agency issues $200,000 in invoices to its corporate clients each month with 60-day payment terms. Rather than waiting two months, it factors these invoices and receives 85% — $170,000 — within 24 hours, using the cash to make payroll that same week.
Why it matters: It accelerates cash flow by converting unpaid invoices into immediate working capital without adding debt to the balance sheet.
.avif)
.svg){kind=small}