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Credit Factoring Advice

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Credit Factoring Advice

Credit factoring is a business financing method that allows a business to get its invoices paid in as little as 24 hours. Credit factoring can provide a business with the necessary capital to operate the business, pay suppliers and grow – and NOT have to wait around for client to pay!!!

Please note that credit factoring is not a business loan. Rather, credit factoring involves a business selling its invoices at a discount for immediate cash. The credit factoring company waits to get paid, while the business gets immediate use of the funds to fund day to day activities. Credit factoring is a medium to long term continuous credit arrangement between a credit factoring company and the seller of business goods or services on credit.

Value Added Service a credit factoring company can offer:-

  • The factor will usually set credit limits for customers
  • A factoring company can arrange bad debt protection through a trade credit insurance companies
  • Financing the trade credit requirements of the client’s debtors.
  • Management of the collection of debts and covering the credit risk.
  • Recourse Credit Factoring
  • Non-Recourse Credit Factoring

Credit Factoring facts:

  • Credit Factoring a financial transaction whereby a business sells its invoices to a factoring company at a discount in exchange for immediate money.
  • Most credit factoring companies guarantee payment of up to 90% of approved invoice value with in 24-48 hours
  • Credit factoring speeds up the usual business cashflow cycle
  • Factoring is offered by many high street banks
  • Credit factoring is also offered by many niche factoring services around the UK
  • To qualify for credit factoring there are no credit checks
  • A credit factoring company is more interested in a your customers credit because they are the ones who have to actually pay the invoices
  • Some credit factoring companies will factor selective invoices.

The UK Factoring Helpline is a leading provider of business finance solutions such as; Factoring, invoice discounting and asset based lending. Call 0800 597 4757 or apply online for an informal chat about credit factoring finance and other business cashflow solutions.

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