| Funding from a Lending Institution |
Funding from a Factor |
| You have to make regular payments on your loan. |
You are paid immediately for your invoices and there is no loan repayment required. |
| You can only use bank credit up to the approved limit, regardless of the pace at which your business is growing. |
There are no preset limits in factoring. You have access to unlimited funds. You get more funding as your business grows. |
| You put up assets as collateral to secure the loan. If you can’t make your scheduled payments you may be forced into bankruptcy. |
The accounts receivable is all the collateral you need when you enter into a factoring arrangement. |
