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The main difference between the two is on who is responsible for collecting payment and who oversees the sales ledger. The provider is the one who is mainly in charge with factoring while with invoice discounting, the control remains to be in control over the sales ledger and the payments. Invoice Discounting means that direct payment is made between you and your customer and there’s no need for the customers to know that the provider or a third party is involved in the transaction. Factoring on the other hand entails that the customers directly interact and settle payments with the provider or factoring company. With factoring, there are solutions such as ‘with recourse’ where a factor can take back the percentage paid to you if a customer fails to make a full payment. While choosing ‘without recourse’ will cost you more in fees. You can opt for invoice discounting if your business is big and you have all the necessary resources to manage on your own the sales ledger and payment collections. Check out to learn more on how you can secure finance for your business.