There are several ways to factor: You can factor your invoices as described here - if you have a large volume of steady invoices, you can also get a line of credit based on those. You can also factor future credit card sales - termed Business Cash Advances - based on your monthly volume - you can receive cash today and then pay back that advance from your future monthly credit card sales - usually around 5% of all future credit card sales until paid back. This means you still keep 95% of your future sales to use in your business and if you have a slow month, you are not tied to a fixed payment amount like most loans. There are also purchase order financing - where you have an order in hand, a finance company may advance up to 100% of that order value to allow your company to complete that job be it to pay your suppliers (to even take advantage of discounts) or even hire labor as needed.

Does this only work with recievables, or can you structure a set of payable invoices this way as well? Effectively having someone pay a chunk of your invioces for you and then paying them back over time with interest? Could be a useful service for large bills that can hamstring your cashflow. Factoring seems to make sense, especially in the current climate where slow payment is pretty common.

Hi longbed, I've heard of factoring but I'm not familiar with what exactly what it means - doesn't it have to do with spreading your payments over time? Do you effectively have someone else pay your invoices for you and pay them back (plus interest I assume?) over time? I'd like to find out more about this so I loo forward to hearing back from you.