How is factoring different from a bank loan?
Factoring is not a loan, so no debt appears on your financial statements. Factoring is the purchase of an invoice at a discount. Banks often have restrictive lending requirements relating to personal credit, cash flow, profitability, equity and years in business that limit them from making loans to many small to mid-sized businesses. Factoring relies on the credit-worthiness of your customers, not your personal or business credit.
