Invoice Factoring

Definition

Selling your outstanding invoices to someone else for immediate cash at a hefty discount—desperation financing with a professional name.

Example Usage

We're factoring our invoices because we can't wait 90 days to pay payroll.

Origin

Medieval trade finance practice, modernized in the 20th century

Fun Fact

Invoice factoring costs typically range from 1-5% per month, making it one of the most expensive financing options

Source: Corporate finance and working capital management terminology

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