Meaning of the word factoring in English

What does factoring mean in English? Explore the meaning, pronunciation, and specific usage of this word with Lingoland.

factoring

US /ˈfæk.tɚ.ɪŋ/
UK /ˈfæk.tə.rɪŋ/

Noun

1.

a financial transaction whereby a business sells its accounts receivable (invoices) to a third party (called a factor) at a discount

Example:
Many small businesses use factoring to improve their cash flow.
The company decided to engage in factoring to manage its receivables more efficiently.
2.

the process of breaking down a number or polynomial into its factors

Example:
In mathematics, factoring is a fundamental skill for solving equations.
The teacher explained the steps for factoring quadratic expressions.