Factoring is an exclusive financing option for B2B companies.  It involves the sale of customer invoices for a large pre-payment from a lender (called a factor), with the balance due when the customer eventually pays.  Your ability to qualify for factoring depends more on the financial profile of your customers than your business---this is because lender repayment depends on customer payments.

 

Here is an example:  You factor a $100K invoice for products that you sold to one of your customers.  The factor gives you $85,000 immediately as a prepayment.   45 days later, your customer pays the $100K invoice and you receive another $12K.  This means that the cost of the factoring was $3k.  This makes sense if you need to speed up your receivables but it may be an issues if you have a tight gross margin.