The Roots of Factoring
While the trucking industry has been around since the late 1800’s, the history of invoice factoring goes back much further. The earliest references to factoring date back to Babylonian times. The ancient Code of Hammurabi served as a guarantee to trading merchants that their cargo would be paid for.
Factoring in Ancient Rome
Factoring evolved during the Roman Empire. Roman factors served in helping businessmen complete transactions. Their duties included overseeing the buying and selling of goods in distant lands, as well as taking goods on consignment. Much like today, factoring helped the ancient Romans have access to funds during slow times. This was especially useful in the agricultural merchants for times between harvests.
Factoring continued to serve some of the first international corporations of the British Empire. From the 1500’s through the 1800’s, the East India Company and the Hudson Bay Trading Company both used factoring to help grow their businesses. The rapid expansion during the Age of Discovery, changed factoring from an oversight function, typically run by family members of traders, into a thriving business of its own.
Factoring in the New World
Factoring has been a part of business in North America since European settlers and traders began arriving. The pilgrims even used factoring to pay for the Mayflower and the trip to the New World. Factoring companies began to appear in American port cities like New York and Boston, ready to help European merchants conducting business abroad. As America grew to become a thriving nation of its own, factoring became more popular domestically. Through the growth of the textile industry through the industrial revolution, factoring became a way for businesses to quickly get the money needed to keep business running.
Today, invoice factoring continues to serve businesses as a way to quickly get the cash they’ve earned. Though it has changed through the centuries, factoring remains a practical way to keep business rolling and goods moving, without taking on debt. To learn how invoice factoring can help your business, give us a call or fill out this form today and get started!