Who is factoring for?
Factoring is primarily for smaller businesses who do not have a large finance department and who may have customers who don't always pay on time. The lender, in effect, become your credit control service. They advance up to 90% of the value of your invoices. They then collect the payments from your customers and once received pass on the remaining balance of the invoice less our service charge.
Factoring is a particularly strong option if you're a smaller business, usually with turnover starting from £10k and up to £2m, and you don't have the time to chase up unpaid invoices. Plus, conversations over unpaid invoices can be awkward: with factoring, the lender will take care of such conversations, allowing you to focus on customer relationships and the sourcing of new orders.
Factoring allows you to use your time and resources in a more efficient way: they chase the invoices on your behalf, leaving you to move your business forward in whatever way you see fit - without the nagging thought at the back of your mind that you're not getting what is owed to you. Furthermore, factoring can give you a cash injection of up to 90% of your unpaid invoices.
How can the Factoring Provider do this?
They have the people and the systems in place to make the collecting of invoices a relatively easy process - certainly much easier than it is for a great many smaller businesses. They make their money by charging you a percentage of the turnover you put through the facility. You receive the remaining percentage of every invoice you issue. However, you do not have to wait around for those invoices to be paid - or hope that they will be paid at all.
Why factoring could work for you?
When you use factoring you can receive up to 95% of the value of an invoice within 24 hours of issue (the rest - less lender charge - is paid on settlement of the invoice), so you can put your money to work immediately.
Factoring allows you to address your long- and mid-term business plans, safe in the knowledge that your sums are not awry: you know exactly what is coming in, which is both a major relief and a strong platform for you to plan for the future.
Benefits of invoice factoring:
· Drastically reduce cash flow pressure on your company today
· No risk to you, no security or other assets required for funding
· Simple to apply, no credit check or trading history is used in your application
· Offer hassle free credit to your customers, from 30 to 120 days
· Offering credit terms exponentially increases the ease of closing a sale
· Factoring has it's cowboys, many companies have been lost due to predatory contracts
· Get a quote with confidence, we deal only with the top 20 trusted companies
· Correctly factor financed companies have a much higher growth rate & profit
Factoring in 3 Easy Steps:
1. The Order
Once you win an order or job from a customer, you agree the credit terms you would like to give them and process the invoice as normal.
2. The Cash Advance
Next you simply forward the invoice to one of the trusted partners we connect you with, upon receipt they wire up to 95% of the invoice value within 12 hours. You are free to use these funds for anything from material costs, staff costs, overheads, machinery, expansion or any other cost or investment you choose.
3. The Collection
Once the credit period has expired there is nothing further for you to do, the factoring company deal with the collection, debt recovery and legal proceedings if required. Leaving you free to operate your business without the burden of cash flow concerns.
You can have the product tailored to your exact requirements, you may not want your customer know you are factoring the debt in which case we can arrange confidential invoice factoring. This is one example of many configurations; compare quotes now to get find the perfect company for your needs!