invoice factoring

Invoice factoring

Factoring is a facility that allows you to raise working capital against your unpaid invoices or debtor book

Factoring provides funding of up to 95% against your existing unpaid invoices at commencement and against all new invoices, usually within 24 hrs

Factoring is a flexible way of improving cash flow, for all business types with gross sales of at least £50k pa. Usually no other financial criteria apply

Credit control is part of the service linked to a factoring facility. The factor carries out most of the credit control processes such as sending out statements, reminders and chasing overdue debts.

As the factor is carrying out credit control on the sales ledger, in most cases your customers will be aware that you are utilising a factoring facility

Charges are split in two separate charges. A service fee is paid, usually a fixed % of each invoice value, typically within the range 0.5% to 2.0%, depending on your circumstances.  This covers the administration of the facility and the credit control services offered.

The second charge is a discounting fee, which is usually a fixed % above bank base rate. This is only applied to funds you use, and works in a similar way to how you are charged interest against an overdraft.

Some factors offer bad debt protection as part of the package, so if a credit approved customer fails to pay an undisputed debt, the factor will credit you with the amount of the debt up to the agreed credit limit.

So Factoring gives you

  • A finance facility linked to your sales, not your balance sheet
  • High levels of funding
  • Flexibility
  • Credit Control Services
  • Improved cashflow
  • Optional bad debt protection
  • Speedy set-up – facilities can be in place within 48hrs

What next? To be one step closer to getting the finance you need

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