The History of Invoice Factoring (And Factoring’s Growth in the 21st Century)

Posted on 16.July.2015 by Mike Winters | @amcomcap

InvoicesInvoice 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.

The following infographic 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.

Here’s the infographic on the history of factoring and its growth in the 21st century, courtesy of CBAC.

History of Invoice Factoring (Infographic)

image description

Roy Brooks and American Commercial Capital, LLC, has provided invoice-factoring services to Houston-area small businesses since 2003. We work with businesses in San Antonio, Dallas, Austin, Fort Worth, Beaumont, Port Arthur, Corpus Christi, and other nearby Texas cities.

If you want to learn more about how cashflow-sensitive invoice factoring can help your business, give us a call at 713-227-3863, contact us here, or fill out our form for a free, no-obligation quote.

READ MORE FROM AMERICAN COMMERCIAL CAPITAL

Houston Factoring Companies: Why Choose American Commercial Capital for Invoice Factoring?

Houston Factoring Companies: Why Choose American Commercial Capital for Invoice Factoring?

Image: Silvio Ligutti / Shutterstock.com

If you’re a Houston-based entrepreneur who has been searching for ways to improve your business cash flow and get the capital you need to grow, chances are you’ve come across a dozen Houston factoring companies who all claim to be the answer to all your problems. Invoice factoring, to put it simply, is when a business sells its accounts receivable (invoices) to a third-party…

Mike Winters 14.05.2021

Business Video Roundup: How to Cultivate Brand Purpose, Recruit Top Gen-Z Talent & More

Business Video Roundup: How to Cultivate Brand Purpose, Recruit Top Gen-Z Talent & More

In this week’s business video roundup, CVS Health CMO Norm de Greve talks about brand purpose and business leadership (among other things), Forbes offers up some tips on recruiting top Generation-Z talent, and CNBC explores the booming, Apple-fueled dongle market. Plus, a quick look into how artificial intelligence will transform multiple industries over the coming years (perhaps including your own) and a timely reminder about Warren Buffet’s three big tips…

Mike Winters 7.05.2021

Business Video Roundup: How to Defeat Procrastination, Make Customers Feel Safe & More

Business Video Roundup: How to Defeat Procrastination, Make Customers Feel Safe & More

In this week’s roundup of great videos for entrepreneurs and business owners, Patrick Bet-David argues why firing the bottom 10 percent is a great idea (for everyone, including those getting fired), Gary Vaynerchuk and other business execs deliver a lot of excellent advice in the latest episode of Marketing for the Now, and Brian Tracy has a few sterling tips on how to turn procrastination into execution. Plus, Stanford GSB…

Mike Winters 30.04.2021
Back
AMERICAN COMMERCIAL CAPITAL HOME

HOW MUCH COULD FACTORING INCREASE PROFITS FOR YOUR BUSINESS?

CALL 713-227-3863