- 19 Mar
54% of Businesses Would Prefer Factoring Over Invoice Discounting
Do businesses prefer factoring or invoice discounting? Common consensus of opinion around the industry would seem to be that businesses generally want invoice discounting and that factoring is not their preference. We put this to the test in a recent market research study. We spoke to 100 randomly selected SME businesses (only 3 used some form of invoice finance already) and we asked them:
"If you had to use an invoice finance facility would you choose factoring (with credit control) or invoice discounting?"
The result was that 54% of respondents said they would choose factoring (remember these are nearly all not existing invoice finance users) compared with only 46% said that they would choose invoice discounting. The results confirmed that the majority of businesses actually would prefer factoring, the opposite of opinion around parts of our industry. This suggests that invoice finance companies need to cater for users of both types of product but that they should not fall into the trap of assuming that everyone wants invoice discounting.