What are the Pros and Cons of Invoice Factoring?

Below is a list of cons for invoice factoring.

• Is often more expensive than invoice financing.
• Relies on payments from your clients. The amount of the fees you pay depends on how quickly your clients pay your invoices. This makes it tough to project how much your financing will cost. In addition, if your customer pays late, then you will face additional fees. Further, if your customer doesn’t pay at all, then you will be responsible for the debt.
• Your customers will be notified that you have invoice factoring because the factoring business will be collecting your customers’ payments. This is a con if you don’t want your customers to be notified by a third party.