Factoring is not a loan. Rather, it is the process of purchasing valid Commercial Accounts Receivables (your invoices) from your business at a small discount. Factoring your accounts receivables means that you actually sell them to Bankers Factoring, as opposed to pledging them as collateral, as you would to a bank or asset-based lender (ABL), along with additional collateral for a business line of credit or revolver. In addition, a bank loan involves two parties; the bank and the borrower (you). Invoice factoring involves three parties; your company, Bankers Factoring, and your company’s customers (the account debtors).