What is the Definition of Factoring:

A Funder buying Account Receivable Invoices (at a discount) owed to Company from either another Company or Government. Traditionally, Textile and Furniture businesses - as far back as 1400 England - used this as a Financing strategy. Some say as far back as Mesopotamia (see Wall Street article under Factoring).

How does this benefit you?

Today's Factors are more specialized then the traditional Textile or Furniture account receivables. Normally, a Factor begins at a minimum of $10,000 and go to the millions, however - some companies are factoring invoices under $10,000. Business Cash Advances aka, Merchant Cash Advances are recently born out of the Factor services. Medical Factors are a specialized Financing group and Hospital Factors are specialized inside that group as well. Lawsuit Financing is one more new area now available for Personal Injury Plaintiffs and Law Firm Financing.

Why sell your Account Receivables?

You can answer that question the best. You are the Business owner, the Comptroller, the Accountant of Counsel, Corporate Board Member. And you Administrative Assistants, Secretaries and Executive Aids have very good insight as well.

Most all businesses hold some form of pending revenue, whether it is Account Receivables, whether you accept payments via Visa/MasterCard acceptance or Insurance payments or other. Use this type of Financing to "turn your future payments into the cash your business needs today" - payments you're expecting to receive in 30, 60, and 90 days or more.

What typical reasons do today’s Businesses use Factoring for their Financing needs?