What is Invoice Financing?
Invoice Financing Definition
Businesses do not get upfront payment against the Invoices for the selling transaction of the goods owing to which a temporary shortage of funds is created in the company. A temporary shortage of funds leads to instability of the cash flow in the company making it troublesome for the company to take care of its daily expenditures like paying salaries to its employees, buying raw materials for production, paying suppliers, etc.
Under this circumstance, the companies can use such unpaid invoices for invoice funding whereby unpaid invoices can be provided as a security to the financial lender and the payment can be received against the unpaid invoices.