September 26, 2022

World Trades

Finance Blog

5 Categories of Invoice Finance

2 min read

Invoice Finance is known as the best way to finance a small to medium enterprise. Similar to all other types of financing, this financial product is just as good as its provider is. When talking about invoice financing, there are a few fraudulent providers who have made it difficult for the customers to put their complete trust in this financial product. However, the latter part of this post is going to deal with the different types of invoice finance so keep reading:

Invoice Factoring 

In a lot of cases, invoice financing happens to be used parallel with invoice factoring but there is a lot of difference between them both. The uniqueness of invoice factoring lies in the fact that the factoring enterprises do not just offer cash in advance for your enterprise, but they also take care of the collections to be made by your company.


This is another form of invoice financing, which is disrupted a little less because the customers are unaware of the fact that your enterprise is involved in it. Discounting invoices of custom also include selling off invoices to receive advance payments, but the lender can make the collections on your behalf as a member of the enterprise.

Selective invoice financing 

This category provides more control to the enterprises by which they can sell invoices in advance. Similar to discounting, the creditworthiness of the customers plays a key role in deciding the approval by the lender.

Spot Factoring 

Apart from choosing the customers whose invoice you are to be submitted to the lender, submission of particular invoices plays a key role. Invoice financing broker Singapore provides major control when compared to the rest of the modes of invoice finance. The convenience and control offered by it make it a bit high priced.

Online Auctioning 

This is the best choice for the ones who want to have better command of the financial experience. It is quite similar to spot factoring as it also lets you choose the specific invoice that you are willing to finance.

These are the five major types in which invoice finance can be divided. Each one of them is different from the other and offers unique features. You can choose the one according to your preference.