Honest comparison of features, costs, and best use cases. Updated 2026.
| Factor | Invoice Factoring | Invoice Financing |
|---|---|---|
| Structure | Sell invoices to factor | Use invoices as collateral |
| Customer Notification | Customer pays factor | Customer pays you |
| Approval Basis | Customer creditworthiness | Your credit + AR |
| Cost | 1-5% per 30 days | 0.5-3% per 30 days |
| Best For | Want fastest cash, no debt | Want privacy from customers |
| Speed | 24 hour funding | 1-3 days |
| Personal Credit | Less important | More important |
Take our 4-minute quiz for a personalized recommendation.
Take Eligibility Quiz →