We used factoring many years ago as an importer & distributor to retail chains. Not sure it is the same but back then, we received 80% of the value of the invoice upon proof of receipt of the merchandise by the retailer. The invoice was stamped that the invoice was basically sold to the factor & the retailer was to pay the factor directly. Upon receipt of payment of the invoice by the factor, we were credited with the balance. We were charged interest on the outstanding balance. Each customer was credit approved by the factor for a certain amount and we could ship up to this amount. In addition, we had a global credit limit that we could borrow against by virtue of these advances. It was essentially a line of credit and if we shipped over the limit, we got nothing. I think the company we used (I am in Canada & it was many years ago) was Walter Heller & I believe they were based in the US.
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