Factoring is a type of invoice finance where a business sells its outstanding invoices to a finance provider (factor) in exchange for immediate cash. The factor takes over credit control and collection of the invoices, providing the business with a cash advance, typically up to 90% of the invoice value.

Factoring is particularly beneficial for businesses with extended payment terms or those that experience cash flow challenges due to slow-paying customers. 

It is ideal for small to medium-sized enterprises (SMEs) in industries such as manufacturing, wholesale, logistics, and staffing, where regular cash flow is essential for operations.