Raise cash from your outstanding business to business invoices

Factoring, also known as invoice factoring, is a financial product which allows your business to raise cash from your outstanding business to business invoices. The invoice factoring provider would advance you an agreed percentage against your unpaid customer invoices.

The factoring company takes assignment of the invoices, giving you a percentage of the total invoice value and then takes responsibility for chasing & collecting the invoice payments. This facility comes with the added benefit of credit control.

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Invoice Factoring is an alternative form of business finance which is growing in popularity.

It is a great alternative for businesses who have just started trading, are growing quickly or who cannot secure the traditional forms of funding from their bank.

Factoring can be useful for improving your ongoing cash flow. It bridges the gap between completing a job and receiving payment for the work. This means you are able to keep up with bill & wage payments, as well as have the funds to make bulk or early payments to suppliers.

How it Works

The majority of invoice factoring companies make two payments against any invoice you choose to fund. The first payment will be the initial bulk payment against the total invoice value, which is known as the pre-payment percentage. The second payment is the remainder of the invoice, minus the agreed upon fee. This is known as the residual balance. The basic steps of Factoring are below:

  1. Firstly, you would send an invoice to your invoice factoring company. They would advise how much they could advance on the invoice.
  2. Once the agreed amount of funding is available, your factoring company will contact your customer to verify the invoice.
  3. Once the invoice has been verified, your invoice finance company will advance the funds to you.
  4. Your factoring company will then chase your customer for payment of the invoices which they have advanced funds against.
  5. Once payment has been made by your customer, you will receive the remaining balance of the invoice, minus the agreed upon fee

To see your Factoring options, use our FREE quote form.

Benefits of using Factoring:

  • Bridges the gap between completing works and receiving payment.
  • The credit control service allows you to focus on running & growing your business, instead of chasing unpaid invoices.
  • Factoring facilities are flexible, they grow with your business as it grows.
  • As they are experienced Credit controllers, their professional approach should improve your debtor days and how quickly your customers pay over time.
  • Factoring allows you to make early or bulk payments to your suppliers, which means you can take advantage of discounts and reduce your production costs.

Free your potential today by releasing cash on outstanding invoices