Invoice factoring is an easy financial solution for companies which may experience difficulties in securing loans from conventional banking institutions. Instead of receiving a loan and thus raising debt, businesses sell their receivable invoices to a factoring company which, in turn, advances a percentage of the total face value of the relevant invoices. The balance is then paid to the company after the outstanding amount has been collected from the client, and after the factoring company takes a factoring fee for itself.
In order to qualify for factoring, Manitoba businesses do not need to have flawless credit records – rather, it’s their clients’ credit records that count. Factoring clients must generally have: