Quote Originally Posted by Questor View Post
In fact the existing business was not on the skids.

It had just secured a 6-month contract and issued the first invoice under the contract when the customer unilaterally changed the credit terms from 7 days to 30 days, hence the need for invoice discounting.
Thanks for the explanation. This is just another example of how factoring works.

Often a small supplier will lose business because they are unable to provide 30 or 60 day terms demanded by the larger retailer or distributor. Factoring facilitates the sale whereby you can get up to 80% of your invoice value. This accelerates your cash flow and allows you to buy raw materials for the next sale.