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The change between factoring and financial institution lending is the change between buying and renting. Financial institution lending is a condominium cost. Whilst you borrow from a bank (or access cash from a line of credit) you ought to pay those funds again in full, plus somewhat extra. That extra is the curiosity cost. This is just like the cost you pay for renting a automobile. Once you’re achieved with the unit you must return it and pay for the privilege of utilization. So it is with a financial institution loan. You’ve the privilege of utilising the financial institution’s cash but need to provide it again when carried out and pay for the use.


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