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Patty Hirsch, a senior editor of marketplace, discusses factoring, a financing method for small businesses. CIT, a major lender and factor, has raised concerns due to possible impacts on businesses. Hirsch explains how factoring works through a shoemaker named Sam, who sells shoes to Nordstrom. Sam sells 20 pairs monthly, all to Nordstrom. This relationship exemplifies how factoring involves selling invoices to lenders like CIT for immediate cash flow.
