Sometimes factoring is criticized for being expensive. If you compare the cost with traditional bank financing this is true. However I would suggest that this is a mute point as companies using factoring are mostly those that do not qualify for bank lending.

On the other hand, crowdfunding somehow is not subject to this criticism, even though it is much more costly than factoring. Just one fact is enough to demonstrate this: Did you know that you will pay the company promoting your crowdfunding on their portal 10% of the funding received? This is more than double the cost of factoring.

There are 2 kinds of crowdfunding: Equity and Debt. With Equity you are actually selling part of your business to the investors. Why would you want to do that at an early stage of your business, when it is not worth much? Also when you have outside investors owning part of your business, this will put a big burden on your time, with the reporting requirements they will impose on you.

With Debt crowdfunding, not only will you have to pay the company promoting your deal a 10% fee, but you will also have to pay the Debt providers a handsome return on their money, probably over 15% per year.