Think whether you have clients that take 30, 50 or 60 days to pay their invoices. Having slow paying clients is expected in today's business environment, but in any case they make managing cash flow a very difficult task. That's why, paying suppliers, salaries and rent becomes a challenge.

Nevertheless, there is a way for solving this problem. The solution involves factoring your invoices.

Factoring is a financing tool. With the help of it you can get your invoices paid in as little as 2 days. Its tasks are to provide your company with the necessary capital to operate the business, pay suppliers and grow. But it is not a business loan. Rather, factoring involves selling your invoices at a discount for immediate cash. While you get immediate use of the funds, the factoring company waits to get paid.

Anyway, factoring can easily be integrated to any business and works as follows:
1. You deliver goods or services and invoice for them.

2. When you sell the invoice to the factor and when they give you the first installment of 70% to 90% of your invoice is called the advance.

3. For running your business you get immediate funds.

4. When the customer pays the factoring company, and you get the second installment (of 10% to 30%) and are charged a small fee for the transaction, all this is called the rebate.

The average cost of a transaction is usually from 1.5% to 3% of the invoice per month. And it doesn't matter that factoring costs vary and are based on transaction size and timing.  

The factoring line can be set up in about a week. Doing your business with credit worthy clients is the biggest requirement for approval.