Invoice Finance Glossary

Invoice Finance
This is a generic terms covering any finance secured against your outstanding invoices.
Debt Factoring
Finance raised against invoices where the lender will chase any outstanding payments due.
Invoice Discounting
Again your invoices are financed, but with Invoice Discounting you chase the payments.
Spot Factoring
A one off payment against one invoice. Can be useful for unusually large orders, or when you don’t want to commit your business to Invoice Finance for other invoices.
Recourse is about who is responsible for unpaid invoices. Non-recourse includes a Credit Protection Insurance premium, which ensures you are not liable if invoices are unpaid.
With Recourse Invoice Finance you are responsible for unpaid Invoices, so it may be worth considering taking out a separate Credit Protection Insurance to ensure you’re not out of pocket.
The actual ongoing funding of invoices as in the terms of the lenders agreement.
Who is actually lending the money against outstanding invoices
Most companies will use a broker to ensure they get a good deal.