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Factoring is borrowing money based on your invoices. This is usually a percent of submitted and eligible invoices that is advanced to you upon presentation and is repaid based on receiving the payment from your customer. This type of financing has advantages under some circumstances. The biggest advantage is that the “credit worthiness” the the borrowing entity is not critical. Factoring companies are relying upon the credit of your customers for repayment.
Factoring can be expensive but it offers a financial solution that can be a life saver to many businesses.
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