Both factoring and invoice financing provide immediate cash based on the value of your invoices. The major differences are who collects the invoices from your customers and how payments are made to the lender. With factoring, the factor or bank buys the invoices from your business and will end up collecting the payment from your customers.  Invoice financing is more like a traditional loan that provides cash, using your uncollected invoices to determine how much they’ll lend you. You’ll still be in charge of collecting your customers’ payments, and you’ll make payments on the money you’re borrowing. With factoring, there is no payment due because the factor buys your invoices.