What is a Factoring Company?

A factoring company is a special type of financial institution that buys future payment streams from annuities that are often awarded from structured settlement in a personal injury lawsuit or from a lottery jackpot winner.

Structured settlement recipients and lottery winners often receive an annuity that pays them recurring payments over time rather than one large check. Those payments can stretch out as much as twenty or thirty years.

A factoring company will purchase a future payment stream or annuity in exchange for lump sum cash. That way the annuity holder can have a larger sum of money today rather than waiting years to get the bulk of what is owed to them.