<br/> <br/> It's no secret that invoice factoring fees will be more than loan interest required by a bank. However, take note that you just cannot truly compare invoice factoring (a short-term debt instrument) with a bank loan (a long-term note) because they are two completely different kinds of funding.<br/>The key to determining if you can factoring companies afford to factor is not to look just at the bottom-line fee, however to also take into consideration how your company can raise its revenues through invoice factoring. Weigh unearned income and lost opportunities because of your scarcity of cash flow. Furthermore, take into account the financial savings you could well experience with invoice discounting. You can minimize late payment expenses and make the most of early payment or bulk purchasing discounts. Also, take into account whether factoring will help you to reduce your accounting team by minimizing the amount of overtime used on collections and credit checks.<br/>It is rare that firms determine not to factor due to the fact that they could not afford to. In reality, most of the times, firms decide to factor since they can't afford NOT to.