What is the difference between invoice purchasing and invoice financing?

Invoice purchasing and invoice financing are two different methods of using your customer invoices as a source of funding for your business.

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To summarize, with invoice purchasing you sell the invoices and transfer ownership and risk, while with invoice discounting you use the invoices as collateral for a loan and retain ownership and responsibility for collection.

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The choice between the two depends on your company's needs and preferences in terms of customer relationship management and liquidity management.