Invoice factoring is a more flexible source of working capital than loans or bank overdrafts and a business is likely to accrue additional benefits, these include

1) Maximising of cash flow

Invoice factoring enables a business to raise up to 90% on outstanding invoices. An overdraft secured against invoices would raise less than 50%.

2) Automatic credit lines

When entering in to an invoice factoring agreement, the business negotiates an initial credit line, which then grows in step with the businesses sales. Bank finance on the other hand has to be continually renegotiated.

3) Sales ledger management / credit control

Under an invoice factoring agreement, the factor runs the sales ledger for the business. The factor employs staff that are experts in debt collection, which can save a business a good deal of time. Time that can be used positively to achieve more sales and further develop the business.

4) Creditworthiness

The factor will assess the creditworthiness of new and existing customers, which will help to minimise bad debts, which can threaten the very existence of the business.

  • Factoring can remove the uncertainty between raising an invoice and receiving the cash.
  • Expert, dedicated collections staff help you maximise receipts from your debtors.
    Rapid turnaround – invoices assigned to a factoring company in the morning can generate cleared funds in your bank account in the afternoon.
  • Empowered Client Managers work with you to provide the “commercial flexibility” you need without continually referring to faceless decision makers.
  • Factoring will usually provide your business with a greater level of funding than a traditional bank overdraft.
  • By adding Credit Protection to Factoring you protect yourself 100% from bad debts. This is called this a ‘non-recourse’ arrangement.