Factoring is the perfect way to get funds without incurring debt and the fees associated with it. Accounts receivable are sold to the third party as a means to get the eventual cash they would bring. It makes the whole situation easier to bear without losing a ton of money.
Debt can be the one thing that can sink a small business. Especially in their first year of operation, debt can be the one thing or hurdle, that the small business owner cannot dig out of. Using factoring, and the assets that the company has can eliminate debt from becoming so substantial that it cannot be overcome.