Factoring is the sale of your accounts receivable (invoices) to a funding source at a discount off the face value in return for immediate cash. The funding source is known as a factor. This is also commonly known as accounts receivable factoring or invoice factoring. If you are doing business to business or business to government you may qualify for this service. Factoring is a pervasive financial strategy with the Fortune 500 and a dominant tool used in Europe.

There are only three methods of financing the expansion of a growing business:
- Apply for loans (Debt)
- Have equity investors ( Give up partial control)
- Factoring ( Cash without debt)
The requirements for converting your receivables to cash are more flexible than they are for conventional banks (banks are highly regulated and have to operate within limited parameters).