What is factoring?
Factoring, otherwise known as invoice finance or debt factoring delivers fast access to cash flow and working capital.
Factoring invoices benefits smaller businesses that may not have the time or the internal resources to chase outstanding invoices.
A factoring invoice contract:
• Prepays up to 90% of the value of your invoices
• Takes control of your sales ledger, collections and credit control
• Offers Bad debt protection
Benefits of factoring invoices to your business
It takes time to renegotiate a bank overdraft. As debt factoring is linked to your sales ledger, the finance grows in line with your business, so…
• By factoring invoices you can finance your next orders
• If are in control of your finances you can plan for business growth
• A dedicated account manager may be able to draw on industry expertise and contacts to help you with your plans for business growth
• A dedicated credit control function may help you to negotiate better terms with your suppliers
• Allows you to concentrate on your customer relationships, whilst the lender’s back office credit control function takes care of any awkward questions related to invoices.
Is debt factoring right for you?
• You are a new start or established business based in the UK selling to other businesses
• Your annual sales are projected at or are already over £50,000
• You raise trade invoices on 30, 60 or 90 day terms
How much does debt factoring cost?
Fees will vary from lender to lender. They generally charge:
• A Service Fee. This will be a percentage of your sales. The calculation is based on your sales, the number of customers you have and the number of invoices you raise.
• Discount (Interest) fee. This will be the interest charged on the money you take from the factoring company.
Get the most appropriate finance for your business.
Save time and money by letting us find the best and most cost effective business finance package for your organisation.
The Business Bureau has vast experience in factoring and invoice discounting.
Contact us now for a factoring discounting quotation. We would be delighted to discuss your individual business requirements further.