A challenge for many small businesses is access to bank financing. In particular, many firms find it difficult to finance their production cycle, since after goods are delivered most buyers demand 30 to 90 days to pay. Sellers issue an invoice – recorded for the buyer as an account payable and for the seller as an account receivable – which is an illiquid asset for the seller until payment is received. Factoring is a type of supplier financing in which firms sell their credit-worthy accounts receivable at a discount (equal to interest plus service fees) and receive immediate cash. Factoring is not a loan. There is no debt repayment and no additional liabilities on the firm’s balance sheet, although it provides working capital financing. World Bank working paper.