Factoring is financing that is different than any other type of loan. Factoring is the purchase of accounts receivables (products or services) for immediate cash. Factoring gives businesses the power to continue growth without weakening equity or incurring debt. The client will be funded in 24 hours after invoices are submitted and verified.
How does factoring work?
- The lender establishes a credit limit on the customers that is submitted by the client.
- Complete the business transaction as usual.
- Send the invoices directly to the lender.
- The lender validates the merchandise or service was performed.
- The client receives the cash from the lender
- Invoices will be forwarded to the client’s manufacturer and they will pay the lender directly.
It’s as easy as that.