Understanding invoice discounting vs factoring
31 Oct 2025
31 Oct 2025
9 min. read
| Invoice discounting | Invoice factoring |
|---|---|---|
Who chases payment? | You | Provider |
Customer awareness | Confidential | Customers know |
Cost | 1-3% plus interest | 1.8-4% plus fees |
Funding speed | 24-48 hours | 24-48 hours |
Flexibility | Whole ledger | Often whole ledger |
Who takes on debt risk? | Non recourse and recourse available | Non recourse and recourse available |
Typical users | Established businesses (£250k+ turnover) | Start ups/smaller businesses (£50k+ turnover) |