Why is factoring receivables beneficial to a seller?
The benefit to a seller of factoring its receivables is that it receives cash on unpaid invoices sooner enabling it to support its ongoing operations. It passes on the responsibility of the invoices to the factoring company along with its associated costs around billing and accounting.
It saves time that would otherwise be spent on managing collections and monitoring credit worthiness of your buyers. It is more flexible and less expensive than other forms of borrowing.