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

Business Video Roundup: Managing a Remote Team, Leading in a Time of Crisis & More

Business Video Roundup: Managing a Remote Team, Leading in a Time of Crisis & More

In this week’s business video roundup, Small Business, Big Heart features Tim Jobe and Bettina Shultz-Jobe, co-owners of Liberty, Texas-based Natural Lifemanship; Columbia Business School talks with Best Buy Executive Chairman Hubert Joly about purposeful leadership in a time of crisis; and Forbes explores how COVID-19 is affecting America’s food supply chain. Plus, Basecamp CEO Jason Fried gives excellent advice and actionable tips on remote team management and CNBC looks…

Mike Winters 22.05.2020

Business Video Roundup: The Best At-Home Business Strategies & More

Business Video Roundup: The Best At-Home Business Strategies & More

In our latest roundup of great videos for entrepreneurs and small-business owners, we continue to see how businesses around the country are coping with our new normal. In Small Business, Big Heart, Jennifer Desrosiers talks about how her Exeter, New Hampshire-based eatery Lanny & Lu is staying afloat while trying to help frontline workers and others in need, and Forbes explores the plight of a comic-book store owner in Cockeysville,…

Mike Winters 15.05.2020

Business Video Roundup: How to Network in the New Normal, Leading Through Crisis & More

Business Video Roundup: How to Network in the New Normal, Leading Through Crisis & More

In this week’s business video roundup, the Small Business, Big Heart series checks in to see how Leo’s Grill & Malt Shop in Stillwater, Minnesota, is navigating the pandemic, networking expert Ivan Misner gives advice on connecting under quarantine, and Koia co-founder Maya French reveals a key piece of advice given to her by Shark Tank‘s Daymond John. Plus, Forbes ponders what skyrocketing U.S. unemployment rates means for recovery and…

Mike Winters 8.05.2020
Back
AMERICAN COMMERCIAL CAPITAL HOME

HOW MUCH COULD FACTORING INCREASE PROFITS FOR YOUR BUSINESS?

CALL 713-227-3863