Factoring, or accounts receivable financing, is a flexible way to obtain funding for recapitalization during a Chapter 11 bankruptcy. Companies that factor their accounts receivable do not incur debt, but rather, sell an asset, their invoices . Accelerating cash flow by factoring helps a business re-establish its credit, so eventually it can qualify for traditional bank financing. In the end, factoring can be a win-win-win for the borrowing company, its creditors and the factoring firm. The borrower receives needed funding, cash flow is available for debt repayment while the factoring firm provides funding based on the borrower’s customer base.