The History of Factoring

It is believed by historians that Factoring originated over 4,000 years ago in the days of King Hammurabi of Mesopotamia. Mesopotamia, which is now occupied by Iraq, eastern Syria, southeastern Turkey, and Southwest Iran, has been called the "cradle of civilization," as it was here that the first literate societies developed. Although Mesopotamia no longer exists many of its great contributions to civilization have endured, including Factoring.

Factoring was then passed along from civilization to civilization until its widespread use in the American colonies. During this time trade was the main source of income for colonists. With the abundance of the North American landscape, colonists cultivated and traded commodities like cotton, fur and timber with the Europeans. Merchant bankers in Europe advanced funds to the colonists for the raw materials. This enabled the colonists to continue to live and work, free from the burden of receivables by their customers.

With the arrival of the Industrial Revolution, Factoring evolved and became more focused on the issue of credit. By helping clients to determine the creditworthiness of their customers and establishing credit limits, factors were able to guarantee payment for approved customers.

Then in the 60’s and 70’s many private factors developed as interest rates rose to new heights. This trend continued to grow in the 80's, primarily due to increasing interest rates and changes in the banking industry. As banks became more expensive and inflexible due to heavy regulations business owners were forced to find other sources of financing.

Today, hundreds of thousands of businesses sell their accounts receivables to increase their cash flow on a daily basis.

If you would like to see if Factoring can benefit your business please visit us at http://www.universalfundingmain.com or for immediate assistance call: 1-800-781-3978