Factoring / Account Receivable Financing: What is it?

Factoring, also known as Account Receivable Financing, refers to when a business sells one or more of its accounts receivable in return for immediate cash, minus a small discount.

Factoring is used by companies across a broad range of industries. It is a form of asset based lending companies use as an alternative to conventional loans and lines of credit because it allows immediate access to affordable funding without the long application and underwriting process.

Other types of asset based lending are commonly, yet incorrectly, referred to as factoring. These include purchase order financing, inventory financing, and a few others..

 

Factoring Basics

Detailed description of the basics: the process, who is involved, general costs and the legal instruments used.

Factoring Articles and Studies

Articles and research papers about factoring and other types of asset based lending from a number of credible sources including the World Bank.

Statistics

Detailed statistics including financing information by industry, company size and geographical location.

Associations

A list of factoring and financing related associations.