An Introduction to Factoring and Invoice Discounting
- Price: £3.60
- Published: December 2015
- Type: Business Information Factsheet
- Format: PDF
Factoring and invoice discounting are finance options that enable a business to be paid a cash advance against any invoiced sales that have been issued under credit terms. The advantage of this service is that the business receives the money without having to wait for its customers to pay their invoices. This is particularly useful when a business is growing and it needs to maintain a positive cash flow.
This factsheet explains how factoring and invoice discounting work and looks at the difference between the two. It describes the situations in which these services could be useful to a business and provides guidelines for deciding whether these services are a cost-effective method of maintaining cash flow.