As a business owner looking to grow your business, you know the challenge of obtaining capital to finance expansion or to meet shortages in cash flow. When a start-up, high growth businesses or a business in transition is unable to secure bank financing, such as through loans and lines of credit, some business owners turn to accounts receivable factoring.

This type of invoice factoring has been a mainstay for years, which large companies often utilize as a credit management tool. Today, receivables factoring has become increasingly popular for small businesses, who are looking for other ways to increase their cash flow and expand their business -- especially when they may be having difficulties (or may not want) to obtain funds through other means such as bank financing or venture capital. But what is accounts receivable factoring and is it right for your business?