Factoring is the sale of invoices (accounts receivable) at a discount. Factoring is a financing tool used by small and large businesses to increase cash flow and raise working capital without the use of debt.

Factoring has been used by companies in many industries for hundreds of years. It has only been in the past 20 years that the use of factoring became common in nearly every industry.

The most heavily factored industries are transportation (motor carriers and freight brokers), staffing, manufacturing, oil field service, and wholesale distribution. Most companies that sell goods or services to other companies or to the government can qualify for factoring

A financial institution that provides factoring services is called a “factoring company.”

For all your questions on what is factoring read our full description here