Invoice finance and revolving credit facilities can both solve working capital shortfalls, but they work in completely different ways. Here is a clear comparison of the three.
Invoice discounting
Invoice discounting lets your business release a percentage (typically 70–90%) of the value of unpaid invoices immediately, rather than waiting 30, 60, or 90 days for customers to pay. The finance provider advances the money; when your customer pays, the funds flow to the provider to settle the advance. The credit control remains with you — your customers continue to pay you, and they may not know the finance provider is involved.
Invoice factoring
Invoice factoring works similarly to discounting, but the finance provider takes over credit control. The provider chases your customers for payment directly, and your customers pay the factor, not you. This removes the administrative burden but means your customers will know you are using invoice finance.
Credicorp Flex
Flex is a revolving credit facility — a pre-approved credit limit you can draw on, repay, and redraw as needed. It is not tied to any specific invoice or customer. You draw funds directly into your business account when needed, for any legitimate business purpose, and repay with interest on the drawn amount.
Comparison
| Factor | Invoice discounting | Invoice factoring | Credicorp Flex |
|---|---|---|---|
| What funds it | Your unpaid invoices | Your unpaid invoices | Credicorp's credit line |
| Limit depends on | Invoice book value | Invoice book value | Trading performance + assessment |
| Credit control | You | The factor | You |
| Customer awareness | Usually confidential | Customers pay the factor | Not visible to customers |
| Use of funds | Working capital | Working capital | Any business purpose |
| Personal guarantee | Varies by provider | Varies by provider | None (Credicorp policy) |
When invoice finance is better
If your working capital needs are tied directly to slow-paying customers and your business generates significant invoice volume, invoice finance scales naturally with sales — as you invoice more, your available funding grows. It is particularly suited to businesses with long payment terms in sectors like construction, professional services, and wholesale trade.
When Credicorp Flex is better
Flex is better suited to businesses that need working capital for purposes not tied to specific invoices — buying stock, covering payroll during a slow period, bridging a seasonal gap, or holding a buffer for opportunities. Unlike invoice finance, Flex does not require you to have an invoice book or to assign invoices to the provider.
See also: Credicorp vs invoice finance/factoring, Invoice finance vs short-term loan, How Credicorp Flex revolving credit facility works.