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Explain Why Businesses Use Factoring to Raise Funds

question 66

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Explain why businesses use factoring to raise funds.


Definitions:

Net Working Capital

The difference between a company's current assets and current liabilities, indicative of its short-term financial health and operational efficiency.

Operating Cash Flows

The cash generated from the normal operations of a business, reflecting its ability to generate sufficient revenue to maintain and grow operations.

Expansion Projects

Initiatives undertaken by a business to increase its capacity, scope, or operations, often through investments in new facilities, products, or markets.

New Ventures

Refers to newly established businesses or startups that aim to meet a marketplace need by developing a viable business model.

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