Description: Invoice factoring is a financing solution in which a business sells its unpaid invoices to a factoring company at a pre-agreed discount. The factoring provider then manages the collection process, while the business receives a large portion of the invoice value immediately. Since this is not a loan, it does not add any liability to the balance sheet—it simply accelerates cash flow. This makes invoice factoring especially useful for MSMEs that regularly deal with long payment cycles of 30, 60, or even 90 days.
Category: Finance
Tag: Invoice Factoring