Invoice Factoring vs. Invoice Discounting — Which Is Right for You?

When exploring invoice finance, you’ll often come across two terms: invoice factoring and invoice discounting. They’re similar, but there are key differences.

Invoice Factoring
- The lender manages your sales ledger and collects payment directly from customers.
- Customers are aware of the arrangement.
- Useful for businesses without a dedicated credit control function or using a lot of time chasing customers.

Invoice Discounting
- You retain control over your sales ledger and collections.
- Customers usually aren’t aware of the arrangement (confidential).
- Suitable for businesses with credit control processes.

Choosing the Right Option
- If you want the lender to handle collections, factoring may be best.
- If you prefer control and confidentiality, discounting could suit you better if you can demonstrate you have suitable credit control functions in place.

At Secure Business Finance, we’ll review your needs and introduce you to lenders offering both factoring and discounting at market leading rates.