What is invoice factoring?
Invoice factoring is a financial transaction where a company sells its accounts receivable (invoices) to a third party, known as a factor (America’s Factors), at a discount. Instead of waiting for customers to pay their invoices, the company receives immediate cash from the factor, typically covering around 85% to 95% of the invoice value. The factor, then collects payment directly from the customers.
This arrangement helps companies improve their cash flow and working capital by providing immediate access to funds that would otherwise be tied up in accounts receivable. Factors charge a fee for their services, which is typically a percentage of the invoice amount, and the remaining balance, minus the fee, is paid to the company once the customer pays the invoice in full.
Invoice factoring can be particularly beneficial for businesses with slow-paying customers or seasonal fluctuations in cash flow, as it provides a reliable source of working capital without the need for traditional loans or lines of credit.
America’s Factors can help businesses optimize their cash flow by providing invoice factoring services to improve working capital. They offer financing solutions tailored to the unique needs of businesses, helping them access immediate cash flow by converting their accounts receivable into cash.
For more information, please contact America’s Factors at 800-794-6786, complete the Inquiry Form or Online Application.