All terms
Finance & Moneyadvanced

Invoice Factoring

Definition

Selling your unpaid invoices to a third-party finance company at a discount in exchange for immediate cash, solving cash flow gaps caused by late-paying clients.

Why it matters

If you have clients who pay on 30-90 day terms, invoice factoring unlocks cash tied up in unpaid invoices, letting you pay suppliers and staff without waiting.

Example

A B2B founder is owed £30,000 in outstanding invoices but needs cash now. An invoice factoring company advances £27,000 (90%) immediately and collects the full amount from her clients.

Related terms

Learn the language of business - and build the systems behind it.

Rich Girl Systems turns 1168+ founder concepts into a step-by-step programme with daily challenges, XP and your own assistant.

Take the free founder quiz