Invoice factoring, also known as accounts receivable factoring, is a financial transaction where a business sells its outstanding invoices to a third-party financial company (factoring company) at a discount.
A merchant cash advance (MCA) is a type of financing that allows a business to receive a lump sum of cash in exchange for a portion of its future credit card sales. Unlike a traditional loan, an MCA is not based on the creditworthiness of the business owner or the business itself, but rather on the future credit card sales of the business.