When you need ready cash for your business and can’t afford to wait for invoices to be paid, you may want to consider factoring. With factoring, you sell the financial rights to your receivables and get the cash immediately.

Here’s how it works: When you’re ready to invoice a client for services or goods, you sell the invoice to a factoring company instead. The factor pays you a percentage upfront, issues an invoice to your client, and then pays you another chunk when the client pays the bill.

The factor makes money by retaining a percentage of the total (often from 3 percent to 25 percent). How big a cut depends on the factoring company and the level of risk it assumes in paying your invoice—in other words, the size of the bill and the creditworthiness of your client.

Because factors aren’t regulated closely, you’ll find their fees and terms may vary greatly. Do your homework before you choose a factor. Pick one that offers good service and takes the smallest possible percentage of your invoices.

You can find factors in the yellow Pages under “Factors.” Or check out these Web sites:

• Aquent Financial Services

• The Hamilton Group

• America’s Factor

• The Invoice Bankers