Factoring or discounting?
The difference is who rings your customer

Discounting, on the service charge, because you are still doing the credit control yourself. The discount charge — the interest on money drawn — is much the same either way. Whether discounting is cheaper overall depends on what the chasing costs you in time, which is a question about your team rather than about the facility.

With factoring, yes: they pay the provider, so it is disclosed by design. With confidential discounting, no — nothing about how you invoice or who collects changes. Disclosed discounting also exists, where customers are told about the facility but you still collect.

Yes. The provider does the collecting but in your name, so your customer never learns a third party is involved. Fewer providers offer it and it costs more than ordinary factoring, because they are doing the work without the benefit of being seen to.

Commonly, yes, and plenty of businesses do exactly that as their turnover and their credit control get stronger. The thing to check first is the notice period on the facility you are already in, which is often three to twelve months. The terms worth reading twice.

Every provider sets its own and they differ a great deal across the panel. The bar for discounting is generally higher than for factoring, because the provider is funding a ledger it is not collecting on. Rather than guess at a number, tell us your turnover and we will say which of the nine would look at it.

There is no single figure, and anyone quoting one is describing their own book rather than the market. The bar for discounting is higher than for factoring because the provider is funding a ledger it does not collect on, and across our nine it varies a great deal. Tell us your turnover and we will say which of them would look at it.

Two percentages, and quoting one of them is how facilities get mis-sold. The service charge is a share of the turnover you put through the facility. The discount charge is interest on the money you have actually drawn, usually quoted over Bank Rate. Both, plus the seven fees that never make the quote.

The gap between what you invoice and what you are actually paid — credit notes, settlement discounts, returns, short payments and disputes. Providers measure it across your ledger and set the advance rate against it, so a business with a clean payment record is advanced more of each invoice than one that issues a lot of credit notes.

How much of your ledger sits with one customer. If a single debtor is a large share of what you invoice, the provider caps how much it will advance against them, because its exposure is really to that customer rather than to you. Worth knowing before you build a cash flow plan around the headline facility.

Every invoice goes through the facility rather than the ones you choose. It is cheaper per pound than selective finance and it is what most full facilities are, but it means you cannot keep your best-paying customers outside it. Selective costs more and ties you in less.

The provider stops funding against it and, on a recourse facility, takes the advance back from you. Disputes are the most common reason a facility costs more than expected, which is why providers look hard at your paperwork before they agree terms.

When you leave, the provider removes the floating charge it registered over the company at Companies House. It happens once the facility is fully settled, it is not instant, and a charge still showing can hold up your next lender. Ask for the timescale in writing when you give notice.

That is the provider’s call, not ours, and it turns on your turnover, your systems and how concentrated your ledger is. If one customer is a large share of what you invoice, that narrows it further. We put the enquiry to the panel and come back with what is genuinely available rather than what looks best on paper.