GD Accounting Glossary
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Invoice Financing

Borrowing against unpaid invoices, or selling them, to get cash now instead of waiting on payment terms.

Invoice financing advances most of an invoice\'s value immediately, repaid when the client pays. Factoring goes further — selling the invoice outright so the financier collects it directly.

Both convert receivables into working capital at a cost. Useful for bridging growth or long payment terms; expensive as a permanent funding habit.

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