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

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

Bills and Invoices

Image: vinnstock / Shutterstock.com

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.

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: How to Build High-Performance Teams, Succeed in BBQ & More

Business Video Roundup: How to Build High-Performance Teams, Succeed in BBQ & More

Image: friends_stock / Envato Elements

“I never start my day without a success plan,” Marie Forleo says. After checking out the videos in this week’s business video roundup, you might be saying the same! In addition to some great productivity tips from Marie, Gary Vaynerchuk reveals how to build high-performance teams by leading with humility instead of fear, Harvard Business School’s Linda A. Hill explains why collaboration and partnership…

Mike Winters 23.09.2022

Business Video Roundup: Overcoming Fear & Self-Doubt, Running a Coffee Shop & More

Business Video Roundup: Overcoming Fear & Self-Doubt, Running a Coffee Shop & More

Image: insidecreativehouse / Envato Elements

Fear and self-doubt come for all of us, eventually. Well, maybe not Kanye West, but everyone else. In this week’s roundup of great videos for entrepreneurs and business owners, Gary Vaynerchuk reveals why it’s best for everyone to eliminate fear in the workplace, Marie Forleo drops some sage advice on how to conquer self-doubt, and Brendon Burchard dispenses some leadership lessons that will help…

Mike Winters 16.09.2022

Business Video Roundup: Food Entrepreneurship, Economic Uncertainty & Quiet Quitting

Business Video Roundup: Food Entrepreneurship, Economic Uncertainty & Quiet Quitting

Image: tehcheesiong / Envato Elements

There’s a lot of economic uncertainty in the air, but that’s no reason to rest on your laurels. It just might be the best time to learn and strategize. To help with that, this week’s business video roundup features Snuggie creator Scott Boilen revealing how he made the last recession a prosperous one for his business, Chicken Meets Rice co-founder Shone Tran talking about…

Mike Winters 9.09.2022
Back
AMERICAN COMMERCIAL CAPITAL HOME

HOW MUCH COULD FACTORING INCREASE PROFITS FOR YOUR BUSINESS?

CALL 713-227-3863