What is Factoring?
Factoring is when a company sells their unpaid invoices at a small discount in order to receive immediate access to cash.
The funds are typically used for operating expenses such as payroll, vendor payments and business growth.
With factoring a business can turn unpaid invoices into immediate working capital and not have to wait the 30, 45 or 60 plus days to receive payment from their customer. Simply put with factoring the business sells their unpaid invoices to a factoring company and receives up to 80% of the funds. Then once the invoice is paid by the customer the factoring company remits the balance minus a discount. Factoring allows you to grow your business and worry less about having the money for day-to-day operating expenses, all without assuming any debt as long as your customer pays their bill.
CapitalPlus Construction Services can work with your business to provide factoring services to help you meet your company’s financial needs.
Factoring is also often referred to as invoice factoring, accounts receivable financing, receivables factoring, invoice discounting and invoice factoring all referring to the process of buying and selling accounts receivables for immediate cash.
Click here to see how factoring can work for your business.