{"id":18590,"date":"2022-10-17T17:34:10","date_gmt":"2022-10-17T17:34:10","guid":{"rendered":"https:\/\/liquidcapitalcorp.com\/?p=18590"},"modified":"2026-07-22T14:16:09","modified_gmt":"2026-07-22T14:16:09","slug":"invoice-factoring-mythbusters-part1","status":"publish","type":"post","link":"https:\/\/liquidcapitalcorp.com\/es\/blog\/alternative-finance\/invoice-factoring-mythbusters-part1\/","title":{"rendered":"Invoice Factoring Mythbusters: Part 1"},"content":{"rendered":"

Alternative funding options are often overlooked sources of financing, but they can help businesses grow exponentially. Here\u2019s what you need to know about invoice factoring.<\/em><\/p>\n

\"Invoice<\/p>\n

Invoice factoring<\/span><\/a> is probably the most unique \u2014 and misunderstood \u2014 of financing options available to businesses. It\u2019s not a loan or a line of credit, and it\u2019s one of the oldest funding solutions around.\u00a0<\/span><\/p>\n

Invoice factoring (also known as factoring or accounts receivable factoring) is an efficient way for companies to <\/span>accelerate their cash flow<\/span><\/a>. Most businesses have regular expenses they need to pay while working capital is tied up in outstanding invoices. When you leverage invoice factoring services, you can convert those invoices into immediate cash, rather than having to wait several months to receive the money.\u00a0<\/span><\/p>\n

So what\u2019s true and what\u2019s not?<\/span><\/p>\n

We examine 5 common myths about invoice factoring and the truth behind this unique financing option.<\/b><\/p>\n

1. The paperwork required can be time-consuming and overwhelming<\/strong><\/h2>\n

This can be the case for some business loans, but invoice factoring is quite straightforward and easy to set up. Also, you could choose to only factor certain clients\u2019 invoices, to make the process even more streamlined (such as only factoring your top 10 customers\u2019 invoices).<\/span><\/p>\n

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\u201cWith financing, it\u2019s important to shop around, do your research and make sure you understand the product. The solution must be transparent and deliver on its promise, and we honestly didn\u2019t see anything that was as easy to understand as what Liquid Capital offered. There\u2019s so much confusing\u2014sometimes misleading\u2014information out there; when you come across a company that\u2019s telling the truth with no hidden items, it\u2019s such a big help. It really gave us a comfort level we didn\u2019t have with other providers.\u201d<\/b>– <\/b>Ken Fincher, President, Defense Product Services Group USA Inc.<\/b><\/a><\/p><\/blockquote>\n

 <\/p>\n

2. Start-ups don\u2019t qualify for invoice factoring<\/strong><\/h2>\n

Many start-ups struggle to qualify for regular financing options, such as loans or lines of credit, and so might think they wouldn\u2019t qualify for invoice factoring. However, because this financing option is an advance on outstanding invoices, rather than a loan, many start-ups can indeed qualify for it.<\/span><\/p>\n

These are the qualifying factors that we focus on:<\/b><\/p>\n