Factoring and Invoice Discounting Helpline

A business fixed rate loan is a type of business loan where the interest rate is fixed for the life time of the loan. So when you start the loan you know exactly what the repayments will be for the lifetime of the loan.

Traditionally taking out a business fixed rate loan from a bank was the only way for businesses to borrow money, however today there is a wide variety of finance options available to you.

While business fixed rate loans are good, because they give you that immediate cash injection and you know exactly what you repayments are going to be, they aren't the most flexible solution to most businesses finance needs.

Today, modern asset based lending is extremely popular because it allows you to borrow money based on assets that you already own. This includes things such as premises and equipment and more unusual assets such as stock, future income and money tied up in your sales ledger.

Why asset based lending is a great solution

Not only are business fixed rate loans not as flexible as asset based lending but they often require some security and can take time to arrange.

It can also be difficult for young and new businesses to access these loans as lenders often require a track record of good performance over several years, often in the form of three years accounts.

Invoice finance is a popular form of asset based lending which is a very flexible solution, is easy to arrange and doesn't require security.

With invoice finance you borrow against your sales ledger, so in effect it isn't really a loan as you have already earned the money, you are just simply being paid earlier by your lender.

There are two choices in invoice finance- Discounting or Factoring.

Factoring

Factoring can release up to 95% of the cash tied up in your unpaid invoices, often within 24 hours of you raising the invoice. The Factoring Company will manage your sales ledger, credit control and payment collection process.

Invoice Discounting

Invoice discounting is similar to factoring, in the way that it releases cash tied up in unpaid invoices, often within 24 hours of you raising the invoice. However it differs in collecting the payment, as with Invoice Discounting you collect the payments yourself.

For further advice regarding business loans please contact us on 0800 597 4757 or apply online using the form opposite.