Invoice Factoring and Invoice Financing are two of the most widely used financial services for small businesses today. But what’s the difference between them? Invoice Factoring essentially lets small and medium-sized businesses access working capital by selling their unpaid invoices to a third-party at a discount. The third-party takes on the risk of not collecting payment, in return for a fee, while the business keeps control of the sales ledger. Meanwhile, Invoice Financing involves taking out a short-term loan against outstanding invoices from a bank or finance company. As with Factoring, the business gets access to cash more quickly than waiting for payments from customers; however, it still retains responsibility for any non-payment. In both cases, businesses get much-needed funds and can continue operations without worries about slow paying customers.