Factoring is used to improve business liquidity and address cash flow challenges by providing quick access to money tied up in outstanding invoices, allowing companies to pay suppliers on time, cover running costs and invest in growth.
One advantage of factoring is that it eliminates the waiting time for customer payments. Instead of weeks or months of waiting, companies receive a large portion of the invoice amount within 24 to 48 hours, providing quick liquidity.
Factoring also reduces the risk of unpaid invoices and losses due to customer difficulties. The factoring company handles the collection process and takes on this responsibility.
