Invoice factoring is an ancient practice. Factoring’s roots go back thousands of years. Early forms of factoring were used in ancient civilizations. It became more prominent in the 1300s and 1400s. Factoring continued to evolve with the growth of trade and industry. The practice gained further traction in the 20th century and within industries like the garment industry.
Here’s a more detailed look at its history:
- Ancient Times: Factoring, or lending against future payments, can be traced back to ancient civilizations. Mesopotamia and the Roman Empire used factoring. Their merchants and traders used it to manage cash flow and facilitate trade.
- 1300s & 1400s: The modern form of invoice factoring began to take shape. Traders used it to advance funds against the delivery of goods, essentially trading contracts instead of the goods themselves.
- 17th & 18th Centuries: Invoice factoring continued to be used during the English colonization of America. London would advance funds to purchase goods from the colonies.
- Early 1900s: The garment industry in the United States heavily relied on factoring to secure raw materials and maintain production.
- 1960s: By the 1960’s many Fortune 500 companies were using factoring as a method to stabilize cash flow.
- Modern Era: With advancements in technology and internet accessibility, invoice factoring has become more accessible and convenient for businesses of all sizes. Today’s factoring companies are large and have significant dollars available. Additionally, their fees have been reduced significantly making factoring a viable option for companies that might have considered it too expensive in the past.
At First Capital, we want to be your invoice factoring source. We are the go-to source for real working capital solutions, even when the banks say no! With a management team having over 30 years experience in factoring, commercial finance and legal funding, you can rest assured we will take good care of your needs. If you are ready to get solutions to for payroll and other working capital needs, give us a call Monday-Friday, 9AM-5PM CDT at 800-497-7701 or go to our contact page and give us the best time to give you a call. One of our Business Development Officers will contact you as soon as possible.