What is Invoice Financing?

Invoice financing is a type of short-term financing where a business uses its unpaid accounts receivables (outstanding customer invoices) to unlock immediate capital.

Instead of waiting 30, 60, or 90 days for customers to pay their bills, a company sells or pledges those invoices to a third-party lender or specialized financial institution (a "factor") in exchange for an upfront advance, up to 80% of the total invoice value.