Factoring is one of the two main types of invoice finance. It allows you to access the money you’re owed, via a flexible funding and collections service which releases up to 100% of the cash tied up in outstanding invoices.
Credit control services and sales ledger management are regular features of this form of finance – by chasing invoices and collecting payments, the funder can free up your time so you can concentrate on running your business. Particular industries have specific invoice finance needs, so this product can be tailored to suit, ensuring it amalgamates into your businesses operation with minimal disruption.
How does factoring work?
All you need to do is…
• Raise an invoice as usual
• Send a copy of the invoice to the finance company
• The factoring company will then verify the invoice
• You will be paid up to 100% of the money tied up in the invoice within 24 hours
• Once your customer pays, you receive the remaining amount minus some fee
How will factoring benefit your business?
• You’ll get instant funding – up to 100% of your outstanding invoices within 24 hours, taking away the worry of late payments
• Guaranteed working capital means you’ll be able to plan and negotiate better terms with your suppliers, e.g. early discounts because funding will allow you to pay for goods earlier
• You can offer extended payment terms to certain customers if needed because you have guaranteed cash flow
• You can free up you time by letting the funder handle credit control and manage your sales ledger
• The funder both collects and allocate your clients’ payments
• You can add Bad Debt Protection to your finance package and have peace of mind that you’ll get paid should customers become insolvent or are unable to pay
• Your customers don’t need to know that you are using a factoring service – it can be offered confidentially, so that you maintain your existing relationship
• You’ll be allocated your very own individual point of contact who can supplement all aspects of your facility
• You’ll stay in control of your finances via live online account information which is always accessible
• Facilities can be tailored your factoring service to your specific needs