---
title: Invoice Finance? It's Just Another Term for Invoice Factoring!
description: Invoice Finance is just another term for Invoice Factoring and this article explains the basics!
image: https://www.fastarfunding.com/hs-fs/file-16063353-jpg/images/invoice_finance-resized-600.jpg
---

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## [Invoice Finance? It's Just Another Term for Invoice Factoring!](https://www.fastarfunding.com/blog-factoring/bid/83371/Invoice-Finance-It-s-Just-Another-Term-for-Invoice-Factoring)

Posted by [Jonah Schnel](https://www.fastarfunding.com/blog-factoring/author/jonah-schnel) on Wed, May 23, 2012

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![Invoice Finance](https://www.fastarfunding.com/hs-fs/file-16063353-jpg/images/invoice_finance-resized-600.jpg?width=324&height=190&name=invoice_finance-resized-600.jpg)Invoice Finance -- what exactly is it?  Well, candidly, it's just another term used for [traditional invoice Factoring](https://www.fastarfunding.com/accounts-receivable-factoring-services/).  Within our niche industry, we hear all kinds of names for the same basic service including invoice finance, accounts receivable finance, invoice factoring, factoring, invoice discounting, working capital finance, etc.  The list seems to get longer each year.  We're not really sure why people want to come up with different names for the same basic process, but maybe that's just an effort to try to be cool...or maybe people just forget to use the same name and so they choose that name that is on the tip of their tongue...and all of a sudden the names just keep evolving like a good old fashion game of telephone (like you use to play when you were 8 years old)!

So just to make it very simple and clear, invoice finance is a financial transaction between a company that has current accounts receivable our outstanding invoices (and wants cash sooner rather than waiting the 30-90 days for their customer to pay them) and a Factoring firm that purchases that accounts receivable or invoices at a discounted price.  Yes, it's that simple!  There are lots of nuances and specialized processes involved to make it all happen, but the basic process is as follows: 1) the company that needs/wants cash today, sells its accounts receivable to the Factoring firm; 2) the Factoring firm advances cash to the company (typically 80%) when it purchases an invoice; 3) the Factoring firm requires the company's customer to pay the Factoring firm directly, and when it does (let's say...60 days later), the Factoring firm deducts it's fee (often called a Factoring Charge) and sends the difference back to the company as a rebate (100% of the invoice amount collected from the customer less the 80% cash advance previously made less the Factoring Charge).

To learn more [details about how Invoice Finance works](https://www.fastarfunding.com/Invoice-Factoring-services/), feel free to download our free Factoring 101 Guide.  Woops...I just did it...I used another name for the same thing!

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 Tags: [Invoice Factoring](https://www.fastarfunding.com/blog-factoring/topic/invoice-factoring), [Accounts Receivable Factoring](https://www.fastarfunding.com/blog-factoring/topic/accounts-receivable-factoring)

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