There are different three types of debt factoring available, more specifically, recourse factoring, non-recourse factoring, and undisclosed or confidential factoring. You are in charge of ensuring your customers pay on time and correctly.īroadly speaking, debt factoring refers to the sale of unpaid invoices to a third party at a discounted rate in exchange for instant cash.ĭebt factoring and invoice factoring are two terms that are used interchangeably. On the other hand, invoice discounting provides you with a more hands-on approach. The debt factoring company’s team of professionals manage collection of payment and release of funds. ![]() Invoice factoring service allows the lender to have more control over the payment of outstanding invoices. Let’s take a closer look at the differences between invoice discounting and invoice factoring. The main disparities between the two forms of financing are identified across the points of credit control, confidentiality, and costs. It’s the most simple type of invoice finance because it’s just money and there are no services attached. When you opt for invoice discounting, the financing process is the same, however, you are in charge of collecting the payment. Your business makes use of the cash it needs whilst the factoring company collects the payments from your debtors. Invoice factoring solutions are not to be confused with invoice discounting, the two share some similarities but overall, they are vastly different.īusinesses that opt for invoice factoring will supply individual debtors or entire sales ledger, and once these are approved, the lender will factor any outstanding invoices. Get more growth opportunities from our partnersīenefit your current customers and acquire new ones Videos and step-by-step guides for all use cases See the businesses that use Sonovate’s growth fuel Just quality information and insights in our ebooks New product features, the latest in technology, funding solutions, and business ideas ![]() Get in touch and let us know how we can help We’re working together to build the future of work pay. ![]() Open a company with the joined Sonovate and Tide proposalįrom startups to £150m+ enterprises we’ve got you coveredįund everything from SOW to retainers and upfront fees with easeĮverything you need to fund large pools of workers globally Industry leading timesheets for your candidatesĮmbed our services invisibly in your own websites, apps and systems Secure credit for your clients in seconds Hook up your accounts software or access funding via API Everything you need to run and manage contractors at scale
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