Both invoice finance and factoring allow you to unlock cash tied up in unpaid invoices. But they work differently and suit different types of business. This guide explains the key differences to help you choose.
Invoice Discounting
Invoice discounting is confidential — your customers don't know you're using it. You retain control of your sales ledger and collect payments as normal. The finance provider advances typically 80–90% of invoice values upfront.
Factoring
With factoring, the factor takes over your credit control function. They chase payments from your customers directly. This is useful if you don't have the resources for in-house credit control, but it means your customers will know you're using a factor.