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.

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.

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