Facts about Invoice Factoring

What is Invoice Factoring? Facts about Invoice Factoring

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Many of us are not acquainted with the term invoice factoring. If you are a beginner and want to know more about the facts about the invoice factoring, then this article is for you. Please follow the article to gain knowledge regarding factoring.

What is Invoice Factoring?

Invoice Factoring is the procedure of financing a revenue in business by swapping their invoices by offering a certain discount to the third party which is factoring the company.

Here we will discuss some facts about invoice factoring.

Facts about Invoice Factoring

  • The term factor is not a new term. People are using it from the 15th century. The term factor derived from a French word, facteur, which means one who represents. In the 19th century, American textile industries, so that they could enhance their business by purchasing raw materials. When World War II ended, the meaning of factor changed in the USA.


  • When Indus Valley Civilisation existed, at that time, Mesopotamian Civilisation was also going on. The area such as Syria, Kuwait falls under this Mesopotamian Civilization. The Hammurabi king had set the law of code. There also exists another code of law that is Babylonia. Today, there are no such civilizations. All of the civilizations are extinct, but the rules of factor still exist.


  • The pilgrims utilise factoring to revenue their trip. Here comes the role of factoring. Factoring enhanced the growth and development of the Hudson Bay trading company when the British were ruling across the world.


  • Nowadays, we all use a credit card to purchase items. The concept of a credit card is to buy on credit. You can buy it, without money, but within a certain period of time, you have to return the amount. The credit card company or the bank plays the role of a factor. They benefit a certain amount from the customer’s credit card. So, basically, what you are shopping with your credit card is a factoring transaction.

Invoice factoring is usable from small businesses to large corporate sectors. The concept of factoring is to get immediate cash when you don’t have money with you.


We have discussed the factoring. We have also shared the fun facts regarding factoring. The concept of factor came from ancient history to the modern period. Though the meaning of both factors is different, the concept is the same. Day-to-day operation is being done daily across the globe with the concept of factoring.

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