Glossary

Invoice factoring

Invoice factoring is a form of financing where a business sells its unpaid customer invoices to a third party in exchange for funds now, rather than waiting for those customers to pay. The factoring company then collects on the invoices directly. Because repayment depends on the invoices, providers tend to look at the quality of the business’s receivables and its customers as much as the business itself. It is one of several product types a funding marketplace can match a business to.