Invoice Factoring
What is Invoice Factoring?
Invoice factoring, also known as accounts receivable factoring or simply factoring, is a financial transaction in which a company sells its outstanding invoices, or accounts receivables, to a third-party financial company called a factor.
The factor then assumes responsibility for collecting the payment from the company's customers on those invoices. In exchange, the factor provides immediate cash to the company, usually a percentage of the value of the outstanding invoices.
The company can use the cash received from the factor to fund its operations, pay suppliers, invest in growth, or for any other business purpose. The factor earns a fee or commission for its services, usually a percentage of the total invoice amount.
Invoice factoring is often used by small and medium-sized businesses that need to improve their cash flow and working capital. It can be an attractive option for companies that are experiencing rapid growth, have a seasonal business cycle, or have long payment terms with their customers.
The GO Funding team evaluates your specific business objectives and requirements. We can place you with the right organization based on our years of experience and extensive financial partnership network.
With a proven track record of getting businesses funded quickly, we can help you skip a few steps that would otherwise require you to contact multiple factoring companies.
Get Cash Now
Invoice factoring services are a type of alternative financing for small businesses. Within 24 hours, an invoice factoring company will issue a cash advance for your company's unpaid invoices. This is advantageous for businesses because it bridges the payment period gap, rather than waiting 30, 45, or 60 days for customers to pay.
The factoring company purchases your invoice to provide you with the cash you require quickly. As a result, no debt is established. You are paid immediately, and your customer pays the factoring company by mailing a check to their address or using a lock box. It's simply a faster way to get paid for your goods and/or services provided. Learn more about the factoring process.
Invoice Factoring Services for Your Business
Slow-paying customers can be detrimental to small businesses that rely on consistent cash flow. When money is held up in unpaid invoices, other operations are often put on hold, such as funding payroll, hiring new employees, paying taxes, accounting, and expanding marketing efforts. This is where invoice factoring can help. Invoice factoring (also known as accounts receivable factoring) allows small business owners to secure the cash flow required for future growth.
