Invoice financing is a financial solution that allows businesses to access cash quickly by using their unpaid invoices as collateral. Instead of waiting for customers to pay their bills, companies can receive a percentage of the invoice amount upfront from a financing provider. This helps improve cash flow and enables businesses to meet immediate expenses. There are two main types of invoice financing: factoring and invoice discounting. In factoring, the financing provider takes over the collection of the invoices, while in invoice discounting, the business retains control over collections. Both options can help businesses manage their finances more effectively.