Who uses factoring services?

Who uses factoring services?

Any business that invoices customers for payment can use factoring services. Service industries such as temp agencies, security guard services, and trucking companies also use factoring services to meet payroll deadlines or simply improve cash flow as needed.

The typical factoring service candidate has £5 million to £10 million in annual sales and £25,000 to £100,000 in accounts receivable every 30 to 60 days.

  • We will find any business a solution to any cashlfow problem they may have and in doing so will give businesses the freedom to deal with customers they would not have been able to service.
  • Factoring Service Fee Structures
  • Factoring services are more concerned with your clients’ credit history than your company’s.
  • Factoring Service Basics
  • An alternative source of financing in such an instance is to use factoring service by selling accounts to a finance company (the factor) in order to gain immediate access to the cash owed to the seller by its customers
  • the company sends its invoices to the factoring service, who immediately pays the company – thereby eliminating the 30-120 payment days
  • Factoring service has been available to a variety of companies for many years.
  • Some factoring service specialize only in retail financing, others specialise in companies.
  • Factoring service may be more expensive than traditional bank financing but often it is the only source of financing that some new or under-capitalized companies can find.
  • Do you sell business products or services?
  • Accountancy and Bookkeeping Services
  • Credit Check Services
  • The factor charges the seller a service charge, as well as interest based on how long the factor must wait to receive payments from the debtor.
  • Factors make funds available, even when banks would not do so, because factors focus first on the credit worthiness of the debtor, the party who is obligated to pay the invoices for goods or services delivered by the seller
  • From a combined cost and availability of funds and services perspective, factoring creates wealth for some but not all small businesses.
  • The classic arrangement which suits most small firms, particularly new ones, is full service factoring where the debtor is notified to pay the factor (notification) who also takes responsibility for collection of payments from the debtor and the risk of the debtor not paying in the event the debtor becomes insolvent, non recourse factoring. The cost is typically higher with this factoring process because the factor assumes a greater risk and provides credit checking and payment collection services as part of the overall package.
  • With the development of larger firms who built their own sales forces, distribution channels, and knowledge of the financial strength of their customers, the needs for factoring services
  • Today factoring’s rationale still includes the financial task of advancing funds to smaller rapidly growing firms who sell to larger more creditworthy organizations. While almost never taking possession of the goods sold, factors offer various combinations of money and supportive services when advancing funds.
  • The services eliminate the need and cost for permanent skilled staff found within large firms. Although today even they are outsourcing such back office functions. More importantly, the services insure the entrepreneurs and owners against a major source of a liquidity crises and their equity.
  • More importantly, the services insure the entrepreneurs and owners against a major source of a liquidity crises and their equity.

We are a nationwide company offering factoring service. Call 0800 597 4757 today

Factoring Menu