Explanation of Factoring & Benefits of Factoring

If your business sales to other businesses on credit terms it can often take time for you to get paid factoring helps you bridge the gap between the time that you raise the invoice and the time you get paid it does it by releasing.


The cash that’s tied up in that invoice most factoring companies can give you up to ninety five percent of the value of the invoice immediately and then they’ll pass the balance of the invoice on to you as soon as it’s paid.

They can also help you by collecting that invoice in on your behalf they can save you time and money because you don’t have to employ your own credit controller and it’s often faster to have a factoring company click the invoice and it would be to collect it yourself and that release is further cash flow benefits factoring is really simple to use you send copies of your invoices to the factoring company.

This can often be done electronically using a secure internet link then the factoring company makes available up to ninety five percent the value of your invoices immediately you can use that cash however you wish within your business manufacturing companies can make payments to you the same day that they receive.

The invoices so you never have to wait to be paid again the factoring company can also help you collect in those outstanding invoices they’ll send out statements on your behalf they’ll send out chasing letters or they can make telephone calls to customers to chase up overdue invoices.

Once they’re collecting the funds they pass the balance on to you less their charges it can significantly improve the cash flow for your business bad debt protection can provide you with up to a hundred percent protection against the risk of your invoice is not being paid where works is that when you take on a new customer a credit check is carried out on your behalf and the credit limit is set for that customer.

You can then sell to that customer up to that credit limit without needing to worry about whether the customer is going to pay or not if they fail to pay your protected the company that’s providing the protection will pay you and it has absolutely no impact on the cash flow of your business.

This can give you real peace of mind print service can also help you found your export to overseas customers by releasing up to ninety five percent of the value of your invoices as soon as you raise them the factoring company can also give you help collecting those outstanding invoices the factor will use their own staff who are familiar with the customs and the local languages required to collect from overseas customers.

They can also offer you protection against bad debts if you want it which can give you added peace of mind when you’re dealing with overseas clients a factoring company will make two main kinds of charge.

The first the service charge which is a small percentage of the value of the invoices that you raise and they charge lists for the service that they provide the second is the discount charge which is similar to interest on the value of the funds that you draw down in order to make a fair comparison between different quotations.

You need to make sure that you don’t just look at a headline service charge on any one quotation you need to look at all of the charges that are going to be levied and work out what it’s going to cost you over the course for year.

If you need help doing this our team is on hand whether your new twitter was financed or an existing user of the products we’re likely to be able to save you money on what you’re paying in a minute.

We look back and in ninety two percent of cases we were able to save our clients money and on average we were able to make them a saving of thirty-three percent we’ve got access to all the providers within the UK. So all you need to do is either call us or visit our website and fill out a request for quotation we won’t charge you for using our service and you’ve got absolutely no obligation to go ahead.

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