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5 reasons your business should consider factoring

14/01/2014

With traditional lending still stuck in reverse, scores of business owners are opening their eyes to the variety of wider funding options that exist.

Although bank loans and overdrafts have their purpose, other cash flow solutions can and do bring numerous benefits to all aspects of running a business.

One of these solutions is factoring. Part of the invoice finance suite of products, many thousands of companies large and small rely on its features in order to reach their ambitions.

Here are five reasons why your business could benefit too:

1. It provides a cash flow boost

This is the most important aspect of a factoring facility. Each time your business raises an invoice, the factoring company will advance up to 90% of its value within 24 hours, providing fast access to the cash that’s required to pay suppliers – and potentially secure early settlement discounts – well in advance of being paid by your customers. And when they do, the remainder is passed across, less the funder’s fee.

2. Access collections expertise…

The second feature and benefit of factoring is that the factoring company will also conduct the sales ledger management on behalf of your business. This not only brings expertise to the process, but it also means you can focus your time and effort on other aspects of your business, such as generating new business. If preferred, this service can even be provided on a confidential basis.

3. …and additional security

We’re all well aware of the difficulties businesses face with regards to getting paid on time. But with a non-recourse factoring facility, the funder will incorporate credit protection to safeguard your cash flow against the threat of debtor insolvency or protracted default.

4. It works in times of growth or uncertainty

This one is not so much of a product feature, but is no less important. Because facilities grow in line with the business, it is just as effective if you’re experiencing rapid growth as it is when you’re struggling to make ends meet. The cash released can be used to fund expansion, or simply to meet day-to-day commitments.

5. It’s on the rise

Here’s the clincher. Although many funding methods are proving difficult to access currently, factoring – and invoice finance in general – isn’t one of them. Client numbers are on the rise and the volume of funding being advanced increased by 6% during Q3 2013 on an annual basis.

So what could factoring do for your business?

Our quote tool will provide an instant indication of how much funding factoring could release against your sales ledger. It doesn’t take long to complete and should help you to visualise the benefits it brings.

Alternatively, you could discuss your funding options with one of our funding consultants. Give them a call on 0800 9774833 for a free, no obligations chat.

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Some of the funders we work with

  • Ultimate Finance Group
  • Close Brothers Invoice Finance
  • Regency Factors
  • Bibby Financial Services
  • Barclays
  • Haydock Finance Ltd
  • PNC Business Credit
  • Calverton Finance
  • Pulse Cashflow Finance
  • Lloyds Bank Commercial Finance
  • Investec
  • Partnership Invoice Finance
  • iwoca
  • Merchant Money
  • ABN AMRO Commercial Finance
  • Davenham Asset Finance
  • Optimum Finance
  • Metro Bank SME Finance
  • Trade Finance Partners
  • Berkeley Trade Finance Ltd
  • Davenham Trade Finance
  • Creative Capital
  • Leumi ABL
  • Santander Corporate & Commercial
  • Team Factors
  • IGF Invoice Finance
  • Royal Bank of Scotland
  • inFund
  • Nucleus Commercial Finance
  • Time Finance
  • InvoCap
  • Sonovate
  • Boost Capital
  • Peak Cashflow
  • Secure Trust Bank
  • Aldermore Invoice Finance
  • Skipton Business Finance
  • 4Syte
  • Asset Advantage
  • Giant
  • MarketFinance
  • Woodsford Tradebridge
  • Roma Finance
  • MaxCap
  • FIBR Tech Limited
  • Shawbrook Business Credit

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