Credit Card Factoring Law and Legal Definition

Credit card factoring is when a factor gives the company cash upfront based on future credit card sales. Credit card factoring is one way to get funding to businesses that are suffering from cash flow problems. Generally, a factor is either a single investor or a business that fronts money to meet the company's cash flow requirements that is to be paid back within a set period of time - much like a short term loan. There are credit card receivables, invoice receivables, accounts receivable factoring and other forms that are routinely used by businesses that tend to have cash flow issues every month or during slow seasons.