Commercial factoring overview and benefits

Commercial factoring overview and benefits

Commercial Factoring has become one of the most popular methods for UK business raise finance and still be able to grow organically. A commercial factoring facility works is low risk as a business is only borrowing against the strength of it own invoices. A commercial factoring facility is so flexible because as the business grows so does the factoring facility.

Commercial factoring is the ongoing sale of your receivables for instant cash. As your sales invoices and customer backlog of orders grow your cash flow from commercial factoring works by growing in unison.

Commercial factoring benefits

  • In most businesses cash flow as unpredictable but with a decent commercial factoring facility that unpredictability is removed.
  • A commercial factoring facility removes the need for businesses to take other expensive methods of finance such as taking a out commercial mortgage on the business premises.
  • One of the advantages of commercial factoring is debts get paid as quickly as 24 hours after an invoice is raised.
  • After securing a commercial factoring facility business owners can concentrate on running their businesses without having to chase up debts the whole time.
  • Some of the best commercial finance rates are available using commercial factoring.
  • A commercial factoring facility solves the major issue your firm faces everyday in cash flow and enables any business to trade on profitably as long as it is raising invoices.
  • Out of all the choices in working capital solutions. Commercial factoring is one of the best because its success is based on the sales of the business.

Commercial factoring disadvantages

  • Factoring is generally suitable for all business types, but it depends on sales.
  • Factoring is subject to lots of charges and small print in contracts
  • A commercial factoring facility reduces gross profit as it takes a percentage of all the invoices.
  • The business and its owners will still be liable for bad debts if the invoices don’t get paid.
  • Some customers do not like dealing with businesses that use a commercial factoring company to collect invoices.

The factoring helpline is one the UK’s leading commercial factoring advisers. Call 0800 597 4757 and a commercial factoring adviser will carry out a business health check and provide an overview if your business is suitable for a commercial factoring facility.

Factoring Menu