Reverse Factoring or Suppliers Guarantee Factoring

Reverse invoice factoring is when a lender interposes itself between a company and its suppliers and commits to pay the company’s invoices to the suppliers at an accelerated rate in exchange for a discount. This is a lower-cost form of financing that accelerated accounts receivable receipts for suppliers.

Reverse invoice factoring allows suppliers to receive discounted payments of invoices which are due to be paid by a buyer.