Factoring payments are a financial tool that allows businesses to get access to quick capital. This is done by selling the accounts receivable owed to a business to a third party, known as a factoring company. The factor then pays the business up front for the value of the invoice, minus their commission. Factoring payments provide small businesses with an alternative method of obtaining cash flow and freeing up capital for expansion or operations costs. Factoring gives companies access to much-needed cash quickly instead of waiting months for payments from customers.