Invoice Factoring for Dummies

So what is Invoice factoring?

Many people do not understand this term. Invoice factoring is a very old form of financing, perhaps the oldest. For over 4000 years people have used some for of factoring. In fact, Hammurabi the king of Mesopotamia was the first the implement this system although it was in primitive form. The Romans were the first to issue actual promissory notes at a discount. The first documented use of factoring was in the pre-revolution American colonies. London bankers would advance funds to the colonies for raw materials and then collect on arrival.

Invoice factoring as we know it today is a type of business financing that allows businesses to circumvent traditional means of funding. Methods such as bank loans and private investments are less preferred because of their restrictive stipulations and their long approval times. To get invoice funding you need invoices that can be factored. In a sense you the company are selling your debt for money now.

Depending on the financing company you could be approved in as little as 24 hours. Transfac capital for instance has some of the fastest approval rates around. Even though you may lose a small percentage your debts you will not have to worry about those clients paying you because it is no longer in your hands. Invoice factoring is a popular method of financing and it is clearly not going anywhere, the only thing that may change is the rates so get your invoice funding today.

Invoice Factoring
Further explanation of invoice factoring.