Factoring

Businesses that sell to other businesses on normal trade credit terms, have to wait a month (often longer) between issuing an invoice and the customer paying. Often, the total amount of all these unpaid invoices represents the greatest asset in the business.

Factoring is the name of the process that is used to get immediate access to funds tied up in accounts receivable. A detailed description of the different aspects of factoring are discussed under the following headings:

• What is factoring?
• How does factoring works?
• How factoring differs from a bank loan?
• What businesses benefit most from factoring?
• Costs and benefits of factoring?
• How do I get started?
• Glossary of terms