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Factoring is a financial solution for business owners to obtain working capital. For instance, if a furniture maker fulfills an order for a retailer and issues an invoice, they may need immediate cash to buy materials and pay employees. However, retailers often take 30 to 90 days to pay invoices, creating cash flow issues. A factoring company assesses the retailer's creditworthiness, tracks payments, and collects from retailers, allowing the business owner to focus on production without worrying about when payment will arrive. This process provides peace of mind and stability for ongoing business operations.