Factor Finance Wiki
Factor Finance: Unlocking Liquidity Through Invoice Solutions
Factor finance, also commonly referred to as factoring, is a financial transaction where a business sells its accounts receivable (invoices) to a third party, known as a factor, at a discount. This provides the business with immediate cash flow, accelerating the conversion of credit sales into readily available capital. Unlike a loan, factoring is not debt-based and doesn’t appear on the balance sheet as a liability.