Financial factoring is a financial transaction where a business, known as the factor, offers another business— known as the client— a way to convert their receivables into immediate cash. The factor purchases the receivables and assumes responsibility for collecting payment from the customer. This process allows companies to receive money now rather than waiting for customers to pay at a later date. Factoring can also provide businesses access to additional capital that may not be available through conventional financing. It is an advantageous way for companies to manage cash flow in order to grow their business.