Invoice factoring companies are banks, but a bank is not factoring company.
Mature accounts receivable finance companies get established and use an institutional bank line of credit for funding purposes. So the factoring client is actually leveraging the factors ability to borrow from a bank. What this means is, the factoring company has built into its rates the cost of money they are borrowing from the bank. By partnering with a bank the factor must adhere to methods and requirements imposed by their lender in order to keep an active line of credit.
On the other hand the bank is not set up to handle the transaction load that invoice financing requires. Each invoice has to be deemed acceptable to a creditworthy customer and tracked going out as the advance and coming in as collected. Fees are deducted and reserve accounts forwarded back to the client. This whole process must be done with a dedicated, knowledgeable staff. So the overhead of resources drives the added cost of financing. But good factoring companies can provide ongoing capital to a business that in some cases cannot secure financing from a bank.