One of the main goals of an insolvency practitioner is to secure lines of fines for the immediate future to allow restructuring of the company in distress – due to the nature of the funding factoring offers, many insolvency practitioners see this as the first port of call when approaching a case.

As with all other instances where the use of an invoice factor is being discussed there are must be certain qualifiers for the company in question, these being:

• invoices to be factored must be to other businesses and not private individuals
• the invoice should be simple with a clear sign-off process
• the turnover of the company should be around a minimum of £50k (otherwise minimum fees might be too high)
• there is no legal reason why invoices or debts cannot be sold to third parties

If the company meets these requirements (and a very large number do) then the insolvency practitioner can immediately bring in a factor and discount the sales ledger to offer immediate and smooth cash flow.

During the whole restructuring process many invoice practitioners retain the use of the factor until the company is in a healthy enough state to be handed back to the management – we have found that when the management retake control many are so impressed with the service they continue to use it.