Simple explanation: Factoring or advancing cash on future receivables is a purchase of the asset or a percentage of the asset. A funder or factor is not lending money vs. the asset, it is a purchase in whole or a percentage of the asset. Some factors structure their facilities whereby they are collecting only a discount rate on the face amount of the receivable. Some charge a lesser discount rate and interest on what funds are available when the invoice is purchased. The later is a better deal for the client if they are good at collections and cash management. ABL facilities are considered LOANS as you re borrowing vs. the value of the underlying asset.