Accounts receivable factoring is when a business sells its outstanding invoices to a funding partner in exchange for immediate cash. Unlike traditional loans, approval is based primarily on your customers’ credit strength, not your financial history.
Here is how it works at a high level:
- You perform a service or deliver a product.
- You issue an invoice to your customer.
- Mōmentum advances up to 90 percent of the invoice value.
- When your customer pays, you receive the remaining balance, minus a transparent fee.