Factoring is selling invoices to receive your money today, instead of waiting 30, 60, or 90 days to be paid. Factoring is an important finance management tool for a small company that does not create debt, nor does it require you to give up any ownership in your company. Unlike a loan collateral is not required in the factoring process, there is no interest, and no debt shows up on your balance sheet. Fees are paid in the form of a percentage discount, deducted after all of the invoices have been paid to the Factor. The amount of discount depends on the length of time it takes to collect on the invoices (common ranges of 2.5% to 7%).

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