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Business debt Factoring in the UK is a business service for businesses whereby a business sells its unpaid invoices to a third party, called a business debt factoring company, at a discount in exchange for upfront money of up to 80-95% in value of the invoice with which to finance continued business.

Is business debt factoring right for your circumstances?

Please note that business debt factoring is a long term commitment and should never be rushed into without taking advice. The business debt factoring company collects the debts owed to a business based on the approved invoices submitted and provides payment upfront within 24-48 hours of invoice approval.

  • A business debt factoring company acts a bit like a debt collection agency for business of all sizes and industry sectors
  • Business debt factoring is used to improve cash flow for business owners who cant wait 60-90 days to be paid. The customer then pays the factoring agency.
  • Most business debt factoring firms offer the facility of an outsourced book debt

collection department which can reduce costs on staffing

  • Factoring firms buy invoice that have been approved and then allow a business to draw funds against the money owed to the business.
  • A factoring business will process the invoices and allow you to draw funds against the money owed to your business.

What make a business suitable for business debt factoring?

  • A business must make annual sales of at least £50,000.
  • A business must a good spread of customers it does regular business with.
  • A business must not be over reliant on one customer.
  • A business must sell goods on credit terms.
  • To qualify for a business debt factoring facility it must pass an audit carried out by the business debt factoring company.

What make a business unsuitable for business debt factoring?

  • Businesses that are ‘B to C based or ‘Business to Consumer’
  • Does work on and get paid on in stage payments
  • Industries and businesses that often get into disputes on a quality and warranty issues.

Business Debt factoring is a finance method used by thousands of business owner in the UK. The UK factoring helpline is specialist broker in the UK who will find the right solution for your business. Call 0800 597 4757 for an assessment on whether business debt financing is right for your business.