--- title: How is Invoice Factoring different from Asset Based Lending - Part 2 description: Part 2 in our series describing the basic differences between invoice factoring and asset based lending. Learn more. 888.833.2286 image: https://www.fastarfunding.com/hs-fs/file-16066139-jpg/images/qa.jpg --- [![Fastar Funding](https://www.fastarfunding.com/hs-fs/file-218610728-png/images/logo.png "Fastar Funding")](https://www.fastarfunding.com/home) 888.833.2286 [![](https://www.fastarfunding.com/hs-fs/hub/96000/file-2141336189.png)](https://www.fastarfunding.com/CMS/UI/Modules/BizBlogger/rss.aspx?moduleid=512111) [![](https://www.fastarfunding.com/hs-fs/hub/96000/file-2141336184.png)](http://www.facebook.com/pages/Fast+AR+Funding/172996222734685) [![](https://www.fastarfunding.com/hs-fs/hub/96000/file-2138208508.png)](https://twitter.com/FactorInvoices) [![](https://www.fastarfunding.com/hs-fs/hub/96000/file-2138208503.png)](http://www.linkedin.com/company/2138452) - [News](https://fastarfunding.hs-sites.com/news) - [Request A Demo](https://www.fastarfunding.com/free-demo-invoice-factoring/) - [Blog](https://fastarfunding.hs-sites.com/blog-factoring) - [Client Login](https://rbcclients.profitstars.com/Login.aspx) [![1be0951f-93ed-45a1-9a60-d60ea667b7cc](https://www.fastarfunding.com/hs-fs/file-2138208518-png/Images1/1be0951f-93ed-45a1-9a60-d60ea667b7cc.png)](http://cta-service-cms2.hubspot.com/cs/c/?&cta_guid=acec70fa-1f9b-445e-9f32-e0b80e73aa58&placement_guid=33d1a5de-e9d3-4f6f-8217-3669d9d01eb5&portal_id=96000&redirect_url=xzz4snd4oPGFx9zl8sEfJ82iKo44s7GlzVEE4GKN0itY1gzxilxEzZG3ijxUDMTP5RCZwQ5PPKU%3D&iv=oZmCNhUtx9o%3D&hsutk=&canon=&__hstc=231982080.6182d4e598874499a19afc1fb7f5ebf0.1416987541327.1416987541327.1416987541327.1&__hssc=231982080.1.1416987541327&__hsfp=2334472877) ## [How is Invoice Factoring different from Asset Based Lending - Part 2](https://www.fastarfunding.com/blog-factoring/bid/80023/How-is-Invoice-Factoring-different-from-Asset-Based-Lending-Part-2) Posted by [matthew begley](https://www.fastarfunding.com/blog-factoring/author/matthew-begley) on Wed, Mar 14, 2012 - [Tweet](https://twitter.com/share) ![invoice factoring, invoice factor, asset based lending](https://www.fastarfunding.com/hs-fs/file-16066139-jpg/images/qa.jpg?width=600&height=600&name=qa.jpg) ## How is **Invoice Factoring** different from Asset Based Lending - Part 2. This is the second installment in a series of articles that explain the difference between [invoice factoring](https://www.fastarfunding.com/blog-factoring/bid/88842/What-Is-Factoring-And-How-Does-It-Help-Your-Business) and asset based lending.   [Click here for a link to the first article.](https://www.fastarfunding.com/blog-factoring/bid/79772/How-is-Factoring-Receivables-different-from-Asset-Based-Lending)  This second article will focus on the basic characteristics of an invoice factoring facility. The main distinction between [invoice factoring](https://www.fastarfunding.com/factoring-loans/) and asset based lending is that a factor will have more control over the accounts receivable they advance against.  A factor will typically book each invoice in their system and will require that the customers of its' clients pay them directly.   By having this increased level of control [factoring companies](https://www.fastarfunding.com/blog-factoring/bid/75449/Invoice-Factoring-Companies-How-Can-You-Tell-Which-One-is-Best) can generally document and fund a new facility faster than asset based lenders.  Because asset based lenders have less control over the assets of their clients they have to have things like, loan covenants, field exams and require CPA prepared financial statements. These requirements take time and cost money.  In my experience it takes between 30 and 90 days for an asset based loan to be funded where an [invoice factoring](https://www.fastarfunding.com/invoice-factoring/) facility can be funded in a matter of days.  The following is brief list of the most important aspects of an [invoice factoring](https://www.fastarfunding.com/blog-factoring/bid/89578/Unraveling-Myths-About-The-Factoring-Loan) facility: - Size - Facility sizes range from $50,000 to hundreds of millions. - Collateral - May be limited to cash and accounts receivable but could also include all business assets. - Recourse -  Full personal guarantees typically required by all non-institutional owners.  - Customer Notification - Customers know factoring companies are involved.  Customer usually receive an assignment letter that notify them to pay the factor directly and invoices are labeled "due and payable to a factoring company" - Financial Covenants - Typically none. - Reporting - Clients will be required to report to the factoring company any issues that could affect the accounts receivable the factoring company has advanced against. - Pricing - Pricing fluctuates greatly between 1% and 4% for every 30 days an invoice remains unpaid. At [Fast A/R Funding ](https://www.fastarfunding.com/invoice-factoring-invoice-discounting-factoring/)we have created a fully electronic, online, invoice factoring system that can help you access the trapped value in your, business to business invoices in a matter of days.  If your firm does business with other firms on terms of 30, 60 or 90 days and has annual sales between $250,000 and $10,000,000 we may be able to help. ## To learn more about online, electronic invoice factoring click the link below.   [![](https://no-cache.hubspot.com/cta/default/96000/3a237f58-6ff0-4c52-abea-7bca817e6b8c.png)](https://cta-redirect.hubspot.com/cta/redirect/96000/3a237f58-6ff0-4c52-abea-7bca817e6b8c)           Tags: [Asset Based Lending](https://www.fastarfunding.com/blog-factoring/topic/asset-based-lending) ### Get a FREE, Quick Consultation [![Small Business Factoring Guide: How it Works](https://no-cache.hubspot.com/cta/default/96000/5663f8a5-939a-4d0d-9528-301f2db1b51e.png)](https://cta-redirect.hubspot.com/cta/redirect/96000/5663f8a5-939a-4d0d-9528-301f2db1b51e) [![Accounts Recievables Loans](https://no-cache.hubspot.com/cta/default/96000/180be21c-6510-448f-ac94-5cb7b26ff888.png)](https://cta-redirect.hubspot.com/cta/redirect/96000/180be21c-6510-448f-ac94-5cb7b26ff888) [![Receivables Financing](https://no-cache.hubspot.com/cta/default/96000/51d9eae7-0f5e-4557-8e1c-c97547f39ca9.png)](https://cta-redirect.hubspot.com/cta/redirect/96000/51d9eae7-0f5e-4557-8e1c-c97547f39ca9) ### Subscribe via email to our blog! 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