Years ago I did payroll for a start-up temporary service and they used factoring to keep up the cash flow. They used factoring because even though they had a large amount of accounts receivable most of it was Net 30 and they had to pay their employees weekly and needed the cash flow.

Basically they buy the a/r from you for a percentage of what its worth and then they absorb all of the risk for collecting.

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Rebecka Melson ~ Virtual Business Services