← Insights
Compare
Compare funding options side by side
Pick two or three ways to fund working capital and read them across the same eight questions: what each is based on, who chases customers, whether customers know, how it is repaid and when it fits. Answers are based on our comparison guides.
Choose what to compare
Showing all five options.
| Invoice factoringCashbook offers this | Invoice discountingCashbook offers this | Selective invoice financeCashbook offers this | Business loanShown for comparison | OverdraftShown for comparison | |
|---|---|---|---|---|---|
| What it is based on | Eligible receivables, debtor quality, concentration and collectability. | Eligible B2B invoices and debtor quality. | One or a small number of invoices. | Business affordability, credit profile, security and sometimes a personal guarantee. | A general bank limit, which may not rise with sales. |
| Who chases customers for payment | The funder. | Your business. | Set by the arrangement for the selected invoices. | Your business; customers are normally unaffected by the borrowing. | Your business. |
| Do your customers know? | Normally disclosed, because the provider handles collections. | Typically confidential. | Depends on the arrangement for the selected invoices. | Customers are normally unaffected by the borrowing arrangement. | No: it is a bank limit, not linked to customers. |
| How it is repaid | Customer payments reduce the funded balance; new eligible invoices may create fresh availability. | Customer receipts repay the facility as invoices settle. | Customer receipts repay the facility as the selected invoices settle. | Capital and interest are repaid on an agreed schedule. | Drawn and repaid within the bank limit. |
| As your sales grow | Availability can increase as the ledger grows. | Availability can increase as the ledger grows. | Targets selected invoices rather than the wider debtor book. | A fixed limit that may not flex with sales. | The limit may stay fixed even when turnover rises. |
| Day-to-day admin | Less work for you: the funder runs collections. | You retain it, with ledger reporting. | Usually narrower information around the selected invoices. | Usually lighter day-to-day reporting once the loan is drawn. | Light, within the bank relationship. |
| Usually best for | Businesses wanting collections support. | Established firms with strong systems. | A specific large invoice or short-term timing gap. | A defined investment or general-purpose capital requirement. | Smaller day-to-day timing swings. |
| Main watch-out | Availability contracts if invoices become disputed, concentrated, overdue or ineligible. | Weak debtors or disputed invoices reduce availability. | Repeated one-off use can signal that a full facility is more honest. | Fixed repayments can strain cash flow if trading weakens. | The bank can reduce or withdraw facilities, often when pressure is highest. |
Based on our guides: Factoring vs invoice discounting · Invoice factoring vs business loan · Invoice finance vs business loan · Invoice finance vs overdraft · Selective vs full-ledger funding · Client handles own collections (CHOCs). Cashbook Finance provides invoice finance and business bridging; loans and overdrafts are shown for comparison only.