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CommonLending

Invoice factoring vs invoice financing

Factoring sells the invoices. Financing borrows against invoices you still own.

What it is

In factoring, the customer may be asked to pay someone else. In invoice financing, you usually still own the invoice. A merchant cash advance is a third, broader purchase of future receipts.

What's typically needed

  • Latest three months of business bank statements
  • Time in business
  • A government-issued photo ID
  • The two options you are actually comparing
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Related: Invoice factoring · Invoice financing