Key points
- Factoring is fastest to cash but customer-visible
- Confidential discounting keeps the customer relationship yours
- Selective finance suits occasional large invoices
- Concentration limits can cap advances against dominant customers
Factoring
The lender advances 80–90% of an invoice value on issue, then collects payment directly from your customer. It's the most cash-efficient option but your customer sees the finance company.
Confidential discounting
You keep collecting the invoices under your own name; the lender advances against the ledger. Slightly more expensive, but the customer relationship stays yours.
Selective invoice finance
You choose which invoices to fund one-by-one. Useful for occasional large invoices without committing the whole ledger.
Costs and covenants
Expect a service fee plus a discount rate on the advanced funds. Read the concentration limits — one dominant customer can restrict how much you can draw.
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