What you need to know about business factoring services

Factors to consider when looking for small business factoring

Deciding whether to use invoice factoring is a consideration for small business starting in the UK as it can be a great aid to cashflow. Whether called receivables factoring, invoice factoring or bill factoring it’s definitely worth considering as it means the cash flow cycle is sped up.

1. Is your business growing?
2. Will you be invoicing on long credit terms?
3. Do you need working capital?
4. Is your business suitable for factoring?
5. Do you have a large spread of invoices?
6. Do you need a factoring facility?
7. Is your sales ledger old with outstanding debts?
8. What is your businesses book debt collection performance like?
9. Does your business invoicing process leave a paper trail?
10. Is your business record keeping process capable of being audited.

Is factoring the best route for you and your small business?

1. What are your cashflow requirements?
2. Do you want to reduce your collection staff’s costs by outsourcing?
3. How much advance on invoices would you need to run your business efficiently?
4. Will you incur bad debts? If so you may need to offer a personal guarantee to the factoring business and take out credit insurance.

What are the advantages of a factoring facility?

1. You should know that business factoring services give you the chance of finance for growth.
2. Business factoring services give you the option of only borrowing money against invoices.
3. Improved cash flow
4. Releasing working capital to your business.
5. outsource the process of your sales ledger
6. Outsourcing the chasing up unpaid debts
7. You should know that business factoring services automatically provide improved credit control for businesses of all sizes
8. Bad Debt protection can be built into a factoring facility.
9. Your business will see a improved working capital position.
10. The ability to negotiate better terms with your suppliers and so compete with larger and more established companies.

Could you and your business be eligible for a small business factoring facilty? Call 0800 597 4757 and our team will explain the benefits of business factoring for small business in the UK to you. If you are unsure whether factoring is for you, you can try out factoring for a few months and see how it goes.