Invoice financing: Give your business working cash now.
Invoice financing (factoring) is simply the selling of your invoices or receivables at a discount to a "factor" for immediate cash. The discount is typically 5% to 10% or so of the value of the invoice. The factor makes their money by collecting the payments from your clients. It is an excellent way to finance a business without the worries and time spent going after standard bank loans.
Your business does not have to factor or sell all of their account receivables invoices. You can pick and choose which ones will give you the most benefit. One other issue to clear up in regards to invoice financing is that the factor does not actually lend the money to your business. They are actually purchasing the invoice outright at a discount to give the quick capital that is needed.
In order to get a factor to purchase an invoice the work or service must have been completed, delivered and accepted; and your client must be a creditworthy risk. The factor does not require financial statements from your business, nor do they even want to audit your books, tax returns, or get to sign into long term contracts. One other positive of this financing source is that even new businesses can obtain capital if they have creditworthy customers.