The history of invoice factoring goes way back to the times of King Hammurabi of Mesopotamia, over 4000 years ago. It has been playing an active role in business finance since then. From medieval businessmen to English colonists – and from garment textile industries to transportation industries – invoice factoring has a long history.
Today, with some banks limiting loans to small businesses, invoice factoring has emerged as an increasingly popular means of alternative finance. Since factoring advances money on invoices owed to a company, it’s not technically “credit.” So businesses can get their hands on much needed cash flow quickly, without going through some of the traditional bank loan underwriting activities.
This infographic by CBAC Funding below traces invoice factoring from ancient times, follows it through to persecuted Jews fleeing to Italy, touches upon its use to help trade with English colonists in America and highlights invoice factoring growth in the 1930s and 1940s in the United States.
It also explains invoice factoring, its benefits for small businesses and its ability to stand the test of time. The idea behind this graphic is to give you a sense of factoring’s place in history as well as its importance today to small businesses.