What is invoice factoring?
It is a type of invoice finance offered to companies who want raise finance secured on their sales ledger.
Invoice factoring is also known as debt factoring and differs from the other type of invoice finance known as invoice discounting.
The main difference is with invoice factoring a lender will take over control of your sales ledger making payment collections from your clients.
With invoice discounting you maintain control of your sales ledger and will process payments from clients.
With a wide range of lenders specialising in invoice factoring, there are many options for you to choose from.
The differences between lenders are
- How much you can finance per invoice - up to 90% of the total invoice value
- Fees – service fees and management fees
- Eligibility - Your annual turnover and sales ledger value