- It refers to the process in which a business sells its unpaid accounts to a third party known as a factor. The factor buys these accounts at a discounted price and assumes the risk of any potential losses
- The small business was struggling with cash flow so they turned to factoring to address the issue.
- The factoring company bought the unpaid invoices from the business and assumed the risk of debt collection.
- The struggling brand took advantage of factoring to quickly turn unpaid invoices into cash and improve their financial stability.