Technically not a loan, Accounts Receivable Financing is also known as Factoring. A third party, known as a factor, purchases a company’s invoice(s) at a discount giving a business owner access to a percentage of that invoice now, instead of waiting until the invoice is paid by their customer. The balance of the invoice, minus the agreed upon discount, is paid to the business owner once the invoice is collected by the factor. Learn more about factoring in our Guide to Factoring.
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