Invoice Finance - factoring & discounting
Cash is King For any company big or small cash flow is the life blood to the success or failure of company. You probably know of many companies that have failed because of bad debts or invoices not being paid on time. Whilst your Sales Ledger may look healthy its no good until you receive the money into your bank account. This is where Invoice Factoring & Discounting can help.
- Improve Cash flow with Invoice Finance
- Release up to 95% of the invoice day 1
- Bad debt Protection & Credit Insurance
- Outsource Credit Control & Collections
- Confidential Invoice Discounting
- Revolving credit facility, Fast Invoice Payment
- Available to New Starts
What is Factoring?
Invoice Factoring and discounting works as follows: The invoice factoring company fully manages your sales ledger and provides you with credit control and collection services of all your outstanding debts. The invoices you issue upon a sale are sent to the Invoice Factoring Company who typically advances up to 90% of the invoice amount to you. The balance, less a management charge, is paid when the customer makes payment directly to the factoring company. The service is disclosed to your customer who typically receives a letter from the Invoice Discounting, or attached note to your invoice, containing payment instructions to your invoice factoring and discounting company.
Who is eligible for factoring?
There are typically two costs involved: a service charge expressed as a percentage of sales factored and an interest charge for the cash advances. The service charge, covering sales ledger management, collections services and, if you wish, bad debt protection can be typically 0.25% - 3% of turnover. The main considerations in determining the service charge are your annual turnover, number of invoices and number of customers. The interest charges calculated on the daily usage of funds is typically comparable to normal secured bank overdraft rates.
Why is factoring important to business?
Funding is flexible and linked to your current and future trading levels and needs. You can plan ahead more confidently, because you know that a fixed percentage of monies invoiced out will actually be available at any given time. Extra up-front finance gives you extra bargaining power in dealing with suppliers. You can take advantage, for example, of bulk purchase, or prompt payment discounts.
Access to credit ratings allows confident trading with new enquirers, ensuring that your hard work attracting customers is not wasted through bad debts. Professional credit control gives speedier cash flow, providing freedom to grasp new and existing business opportunities. Expert help can be extended when expanding into overseas markets, giving you the peace of mind despite the physical distance.
Can play a significant part in Business Rescue and Restructure. Often the fastest business life line for a company receiving a Bad Credit rating from customers slow or poor payment record. Company Voluntary Arrangement ( CVA ) CCJ’s, Company Bad Credit Ratings and defaults or Phoenix Accepted.
"M.B.O using factoring"
"An Entrepreneur used Discounting and import finance to exploit a new market beating the competition"
"Business rescued, by using factoring injecting cash directly into our business within 4 days"
