Factoring is essentially the sales of receivables. It provides an innovative cash management solution for further business opportunity as it unlocks your receivables and turns it to cash the fastest way.
Salient Features
Factoring is simply selling invoices to receive your money immediately instead of waiting to be paid by your clients.
Fees are paid in the form of a percentage discount deducted after all of the invoices have been paid to the factor. The amount of discount depends on the length of time it takes to collect on the invoices.
Unlike a loan, collateral is not required in factoring.
There is no interest and no debt shows up on your balance sheet.
