Invoice Factoring

This product provides SMEs with the opportunity of raising finance by selling their debts due from their customers on a continuing basis to raise cash to finance their operating and working capital needs.

Invoice finance companies can provide a full factoring service that provides advances up to 90% of approved invoices. Invoice finance companies will prepare your sales ledger, check customers credit worthiness and carry out debt collection work, including the distribution of statements, follow up letters and telephone calls to difficult payers.

This service provides clients with time to focus on revenue generation or value adding activities.

CHOCs  – Client Handles Own Collections (CHOCS)

In certain situations as an alternative to liquidity handling the telephone collection of debts, invoice finance companies can provide a different type of factoring facility that allows clients to retain this responsibility for themselves if they so desire.

Therefore, the Client Handles Own Collections (CHOCS). This can be done for all the debts or just for selected debtors.

Invoice Discounting

This proposition is different to Factoring in that it is relevant to businesses that find it easier to administer and collect their own debts. Again, invoice finance companies can provide prepayment up to 90% of the sales invoices within 24 hours from the time the client has raised them.

The great thing about this type of facility is that as it is linked to the clients sales ledger, funds grow automatically as the clients sales increase, ensuring that the business has constant access to cash, instead of it being a fixed facility which has to be re-negotiated.

This type of facility is particularly relevant for businesses developing new or growing markets, increasing stock levels for seasonal demands. Accountants are increasingly seeing this type of product as a strategic financial tool to support corporate restructures or MBO’s.