Whilst factoring may suit any type of business at any time, there are a number of key ‘Triggers’ to look for which would indicate if factoring is beneficial to your business.

‘Triggers’ To Look For

Turnover growing rapidly  = Finance sales to reduce cashflow pressure
Overdraft under pressure  = Immediate release of working capital
Gearing too high  = Use debtors as better leveraged asset
Too much cash tied up in unpaid invoices  = Need to reduce debt turn
Improve credit control  = Outsource to release time & resources
Looking to do MBO/MBI – Deposits for Capital Items or Properties  = Cash injection against debtors and future sales
Customer wants to reduce personal security  = Unlock sales ledger asset
Seeking to break into export markets  = Need to compete on open A/c terms
Start up / insufficient capital base  = Use sales to fund growth
Using competitor services  = Potentially improve service. Increase funding levels
Customers paying on extended terms = Ability to pay staff and creditors on shorter terms