Invoice factoring is a type of financing in which businesses can receive advances on their unpaid invoices. It allows companies to unlock cash from accounts receivable without taking on debt or relinquishing ownership of the outstanding income. In this process, a third-party factor essentially buys your invoices at a discounted rate and pays you up front. The factor then collects payments from your customers and keeps a portion as its fee. By having access to funds sooner, businesses can grow faster and improve their financial operations. Invoice factoring provides a reliable source of capital and helps bridge cash flow gaps between sales cycles.