When companies need financing, a traditional loan is usually their first thought, but there are many times when invoice factoring is the better choice. While a bank loan requires extensive collateral and a strong credit history, invoice factoring does not require collateral, and even smaller or newer businesses can apply. This is because, instead of looking at your personal or business credit score, the factoring company is more concerned with how likely your customers are to pay their invoices. the approval process for a bank loan is often lengthy and strict, but you can get approved for invoice factoring on the same day and get your cash advance soon after.