There are several different types of invoice finance available to businesses, including:

1. Factoring: In factoring, a business sells its unpaid invoices to a finance provider, known as a factor. The factor then advances a percentage (typically 70% to 90%) of the invoice value to the business and takes over the responsibility of collecting the payment from the customer. Once the customer pays the invoice, the factor releases the remaining percentage of the invoice value to the business minus any fees or charges. The customer is made aware of the factoring company’s involvement; the factoring company undertakes all the credit control and operates a “mirror” debtor ledger.
2. Confidential Factoring: Effectively the same as above; however, in this scenario, the customers need to be made aware of the factoring company’s involvement.
3. Spot factoring: Spot factoring, also known as selective or single invoice factoring, allows a business to sell individual invoices to a finance provider rather than all. This provides flexibility to choose which invoices to finance based on the business’s immediate cash flow needs.
4. Disclosed Invoice discounting: Invoice discounting is like factoring but with one key difference: the business retains control over the collections process. The finance provider, usually a bank or a specialised lender, provides an advance based on the total value of the debtor book at any one time, usually month end. Once the customer pays the invoice (into a trust account in the business’s name but operated by the finance company), the business repays the advance and any payments to the finance provider. The involvement of the finance provider is disclosed to the customer.
5. Confidential Invoice Discounting: As above, Confidential Invoice Finance allows a business to access funds against its invoices without disclosing the arrangement to its customers. The finance provider works with the company in the background, and the business retains control over the collections process.

It’s important to note that the availability of different types of invoice finance may vary depending on the region, country, and specific finance provider. Each type of invoice finance has its advantages, disadvantages, and costs, and it’s essential to thoroughly understand the terms and conditions, fees, and implications of each type before choosing the one that best fits a business’s needs. I’d like you to please seek professional advice from a financial expert or accountant to make sure the correct type of invoice finance is selected for a business’s unique situation.