What is Invoice Financing?

Invoice financing is a financial arrangement in which a business leverages its unpaid invoices to secure immediate funding. This form of financing allows businesses to receive a significant percentage of the invoice value, sometimes within 24 hours, by using the outstanding invoices as collateral. The lender provides the funds based on their risk assessment, charging a fee for the service. 

Invoice financing helps businesses improve cash flow, meet operational expenses, and invest in growth without waiting for customers to settle their invoices. It is particularly beneficial for businesses with limited collateral, as the unpaid invoices themselves serve as the security for the loan.