What is the Difference Securitization and Factoring?

Factoring is purchase of receivables (book debts) of a company and liquidate theses receivables to manage the company's cash flows and is with or without recourse.

While securitisation is a process to convert illiquid assets into liquid assets by converting longer duration cash flows into shorter duration cash flow and is without recourse.    

Securitisation is similar to Factoring-without-recourse. 

Securitisation:  A loan mortgage company will have long term borrowers in its "Receivables" who will pay in installments. Inorder, to unblock these fund, the company will sell these receivables to a "SPV (special purpose vehicle) at a discount, who in turn issues bonds on security of these receivables. Bondholders are enticed to buy these bonds due to attractive interest rates. 

On the other hand, factoring also involves unblocking the funds remaining in receivables. But, instead of issuing bonds, the companies outsources their receivables to factoring agency at a discount. There are different types of factoring depending on who takes the risk of bad debt and how the receivables are funded by the factoring agency. 

Factoring comprises of selling a company's receivables to a third party for a quicker payment (usually at a discount).

Whereas securitization involves converting longer duration cashflows into shorter duration.

Factoring is done for short term assets and securitization of longer term assets.