No, factoring is primarily an accounts receivable lending agreement with limited credit risk protection. Generally, a factoring agreement places a lien on all of a company’s assets, allows for notification of the factoring arrangement and direct interaction with a company’s customers.
Trade Credit Insurance only protects against losses due to a business’s customers’ financial inability to pay. While it can enhance a borrowing relationship, it is not a lending mechanism. No liens are involved and is totally transparent to a business’s customers. The customer will not be contacted by the insurance company unless a claim is filed against them.