Is invoice factoring the same as invoice financing?
It isn’t. Invoice factoring technically isn’t a loan. Instead it’s an advance with a 2-step process that doesn’t involve repayments or interest. When you sign up for invoice factoring, the factoring company typically handles invoice payments from your clients and gives you the funds after your clients pay up.
On the other hand, invoice financing is a secured business term loan backed by your business’s unpaid invoices. You repay it in installments over a set period of time with interest and fees. And you’re still in charge of collecting on your invoices.