Factor Lending, also known as Invoice Factoring, is a type of financing where a business sells its unpaid invoices to a third-party company, known as a "factor," at a discount in exchange for immediate cash. The factor advances a percentage of the invoice’s value upfront (typically 70-90%) and then collects payment directly from the business's customers. Once the customer pays the invoice, the factor releases the remaining balance minus a fee for the service. Factor lending is often used by businesses that need to improve cash flow quickly, especially those with slow-paying clients or seasonal revenue fluctuations.