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The History of Factoring

Factoring has been around for at least 4000 years. The individual responsible for creating a code for business and for creating government regulation for factoring was Hammurabi, the king of Mesopotamia. He was also the first to come up with the inspiration of factoring. Factoring was also utilized by the Romans who sold promissory notes at a discount. Factoring has grown to be a multi billion dollar industry and become a key source of capital for small, medium and large business throughout the entire globe.

Some of the first widespread recognition of factoring was in the early colonies of America before the revolution. At that time wood, fur, cotton and other commodities were shipped to the colonies from England. Bankers in Europe and England gave a funding advance to these early colonists for the materials before they reached their destination. This was an enormous blessing to the colonists as they could go about their business without waiting to get paid by their customers in Europe.

The factors or factoring businesses of the pre-Revolutionary times offered advances against the receivables of their clients which enabled the clients to continue with their operations long before they could get payment for what they sold. In the early 20th century factoring in the United States was primarily dominated by the textile industry. After World War II factoring companies brought factoring to invoice-based businesses and expansion has been taking place ever since.

Factoring became increasingly popular in the 60’s and 70’s and became well used in the 1980’s. Banks on the other hand became more heavily regulated which created pressure for businesses to find other more creative and easier to obtain sources of funding or financing for the growth and profit of their businesses.

The trend continues for banks to shy away from offering capital to businesses which has created an explosion of factoring in America today as a very efficient means of acquiring capital without selling any equity or shares in a company and without any monthly payments.

This is where Factorcash.com comes in as a lender which specializes in offering highly competitive rates for invoice factoring. Factorcash.com’s forte is invoice factoring unlike other factoring companies which do not specialize in any one type of financing.

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