In laymen’s terms Invoice Factoring is the process where a company is pre paid for their sales invoices from an invoice factoring company. This allows a company to increase their working capital and maximise on their cash flow.
Invoice factoring companies make their money by charging a percentage of the amount being factored. For example, lets say a company issues $100 invoice, they may only get $95 from the factoring company with the remaining $5 being the commission for the service. I hope this helps! (Make it simple not compound) glta
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