The History of Invoice Factoring (And Factoring’s Growth in the 21st Century)
Invoice factoring has remained much the same since it came into vogue in the Middle Ages. Yep, factoring has been around a long, long time. Invoice factoring has always been a fast, reliable way for businesses to improve cash flow without getting bogged down with debt that has to be repaid. The first recorded use of factoring is said to have been 4,000 years ago, in the kingdom of Hammurabi of Mesopotamia, but let’s take a brief look at its history over the years through today.
CBAC’s infographic (click to view) tells the story of invoice factoring in a nutshell, noting its use by Jewish businessmen in the 1300s and 1400s and later by English merchant bankers advancing funds to colonists settling in America in the 1600s and 1700s. Jumping ahead to the 1910s and 1920s, invoice factoring was popular in the garment and textile industries. In the 1940s, the United States saw a factoring boom in the textile and transportation industries. And in the 1960s, ‘70s, and ‘80s, “rising interest rates and bank regulations made invoice factoring more popular as it did not require the same sort of credit checks.”
The same thing may be happening today, as it’s becoming harder and harder for small businesses to get approved for traditional bank loans and financing. Will we see another boom in invoice factoring for small businesses? Time will tell. The use of invoice factoring has already grown by 15% in the U.S. since 2004. As businesses become aware of factoring’s benefits—immediate cash flow for unpaid receivables, no credit checks, a reliable option for businesses who can’t secure a bank loan, among others—it’s likely we’ll see an uptick in businesses using invoice factoring to grow and succeed.
Click here to see the full infographic from CBAC.
READ MORE FROM AMERICAN COMMERCIAL CAPITAL
Business Video Roundup: Social Media, Procrastination, Purpose & Motivation

Image: kitzstocker / Envato Elements
In this week’s roundup of great videos for entrepreneurs and business owners, Gary Vaynerchuk lays down some cold hard truths about social media in business, Marie Forleo drops 75 minutes’ worth of knowledge about overcoming procrastination, and Horn Hospitality Group CEO Matt Horn talks about finding purpose and turning that into a thriving business. Plus, Madison Reed CEO Amy Errett reveals the secret list…
Business Video Roundup: Pricing Strategies, Finding Inspiration & More

Image: josecarloscerdeno / Envato Elements
In this week’s business video roundup, Peloton SVP Dara Treseder delivers a solid hour of leadership and business insights at Stanford GSB, Forbes’ Amy Blaschka talks about how to find inspiration when you’re in a rut, and Marie Forleo outlines a few simple pricing strategies to help you figure out if you’re charging enough and find your pricing sweet spot. Plus, Zara Terez Tisch…
Business Video Roundup: Start a Business from Nothing, Focus on Mental Health & More

Image: ckstockphoto / Envato Elements
In this week’s roundup of great videos for entrepreneurs and business owners, Marie Forleo reveals how to overcome decision paralysis and start a business from nothing, Nubank CEO David Vélez shares his business wisdom at Stanford GSB, and Bonobos co-founder Andy Dunn talks about destigmatizing mental health in entrepreneurship and the workplace. Plus, Michael Dell and other business leaders dish out advice to new…