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
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