Article 18

Factoring vs Invoice Discounting

Although on the surface invoice finance and factoring seem fairly similar, in reality, these solutions are actually very different.

The key differences between invoice finance from MarketFinance and factoring can be broadly categorised into four areas: cost, contracts, credit control and confidentiality. Let’s take a closer look:


MarketFinance invoice finance

Factoring

CREDIT CONTROL

We don’t chase your debtors for payment so you maintain full ownership of those relationships.

You’ll need to hand over credit control to your provider so they can chase your debtors for payment.

COST

Invoice finance tends to be more cost-effective and comes with the promise of no hidden fees.

Providers often quote favourable rates at the outset but then add extra fees every month, making it considerably more expensive.

CONTRACTS

It’s a flexible solution. You can choose to finance some, or all, of your outstanding invoices and whether you’d like a contract or pay-as-you-go facility.

You’ll likely get locked into a rigid long-term contract and could be forced to factor all the invoices in your ledger.

CONFIDENTIALITY

For our pay-as-you-go option, we use a discreet online tool to verify invoices and call on your behalf when we verify by phone.

Our whole-ledger option is completely confidential.

For both solutions, we set up a trust account in your name, so your customers pay invoices to your business, not to MarketFinance.

Factoring facilities are generally disclosed. That means your customers will know that you’re using a factoring facility and pay invoices to your provider rather than to your business.


MarketFinance's offering

With our invoice finance solutions, you get:

  • A hassle-free experience: our smart online platform is easy to use, taking the admin burden away from financing
  • Fast funding: with quick decisions and easy set-up, you can get funds and get on with your business
  • Help in real-time: from application to ongoing account management, our customer service team is here to help
  • Straightforward costs: no hidden fees, so you always know what you're paying