A Factoring company will typically provide you with up to 90% of your outstanding sales invoices (also known as your sales ledger, or accounts receivable.)
With outstanding unpaid sales invoices of £500,000, your company could receive an immediate cash injection of up to £450,000. This releases working capital which immediately improves the cash flow of your business, and enables you to pay creditors, negotiate supplier discounts and provides liquid funds for expansion and growth.
How Does Factoring Work?
The Factoring Company will provide you with up to 90% of your existing debtors, or sales ledger, normally within 24 hours of you raising the invoices. The remaining 10%, less the Factors charges, are passed on to you when your client, or debtor, has paid the invoice. The Factoring Company will then continue to provide you with up to 90% of your outstanding sales invoices on an ongoing basis, usually within 24 hours of you raising the invoices. The Factor will undertake the task of chasing and collecting your unpaid invoices. By fully managing your sales ledger, you receive a credit control and collection service which leaves you to concentrate on running your business and increasing.
Choosing Between Factoring & Invoice Discounting?
This will largely depend on whether your business is of sufficient size to afford the staff and IT systems necessary to effectively and efficiently collect and manage your outstanding invoices and sales ledger. When we undertake our initial consultation with you, we will advise and recommend the most appropriate funding solution for your company. We have many years experience dealing with Factoring Facilities, Invoice Discounting Facilities, and Confidential Invoice Discounting facilities. Our expertise enables us to identify your need, assess the most appropriate solution, and introduce a company who can provide that solution.