There are many funding options out there. The most commonly known and used is a traditional bank loan, since many people are familiar with the process. If you look into other funding options, you will find that factoring is pretty different and maybe a little confusing if you don’t understand how it works. Here are just a few of the differences between factoring and a bank loan:

1. There are three parties involved (the factoring company, the business factoring their invoices, and that business’s clients), as opposed to two in banking (the lender and the lendee).
2. Factoring will typically provide you with more cash per invoice.
3. It usually can generate cash within a day of invoicing.
4. Factoring doesn’t require any collateral.
5. Most factoring companies will provide additional services. These include credit checks, invoice auditing, and collection duties.
6. Factoring isn’t solely based on the business’s credit history, but more so on the creditworthiness of the business’s clients that receive the original invoices.
7. The amount of capital available in factoring can grow as the business and its sales grow.
8. Factoring is debt and interest free.

If factoring your invoices sounds like the right fit for your business, sign up with us today!