SME factoring in the UK

SME factoring in the UK

In the UK factoring and other forms of finance have to be considered by many SME owners. Please note that SME factoring has become so common that many banks are advising its customers to use factoring to help with SME businesses grow and stay competitive.

What makes an SME suitable for factoring?

  • SME factoring is only available where an SME has an sales of around £4,000 per month
  • SME factoring is also available for new businesses and greatly depends on who the SME’s customers are.
  • SME factoring is a realistic option for business with more than just a few customers
  • SME factoring is only available business to business transactions
  • For an SME to consider factoring they its business transactions must not be too complex with contractual arrangements or warranty provisions

What are the advantages of SME factoring for business in the UK

  • Factoring provides an SME with cashflow.
  • Working capital is never a problem for an SME using factoring
  • Prices are usually competitive because factoring companies are keen to sign up SME business
  • SME factoring involves the outsourcing an SME’s sales ledger
  • Factoring allows more time for SME owners to manage the business
  • Factoring usually leads to customers paying quickly

SME factoring is an aid to business growth, provides protection from bad debts and makes sure that cash is always available for capital investment or every day cashflow needs.

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