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FAQ > What is the difference between Satago’s Invoice Finance and other forms of factoring or accounts receivable discounting?

What is the difference between Satago’s Invoice Finance and other forms of factoring or accounts receivable discounting?

There is one big difference between factoring and discounting and that is that the transaction is not confidential to your customers. With accounts receivable discounting, a company buys your invoices and is often referred to as the “factor” and this is why the entire process is sometimes referred to as factoring.  Your outstanding invoices are bought for less than the face value in order to mitigate the risk that your customer will not pay the invoice or will request a credit. The discount compensates the buyer for the underlying risk of the receivables and the delay in receiving the funds.  The sale is usually undertaken without recourse and the purchasing company then collects the debt directly from your customers, assuming full responsibility for collecting the money. So, with factoring, both funding and credit control are provided by the purchaser while with traditional invoice financing only the funding is provided.