Benefits of Factoring

Factoring – How it benefits your business

Invoice factoring is a finance solution that brings added value to your business. Some arrangements offer additional benefits which you may find particularly suited to your needs.

 

Instant Cash

Receive cash advances against outstanding sales invoices within 48 hours instead of waiting up to 120 days to get paid. This immediate injection of funds provides you with additional working capital, enabling you to finance growth, through capital investment and marketing.

 

Improved Cash flow

Invoice factoring improves your cashflow by advancing up to 90% of the value of your invoices, usually within 48 hours of issue. By eliminating the time delay between issuing an invoice and receiving payment, factoring boosts your cashflow, improving working capital, and giving you the funds to invest in growth.

 

Early Supplier Discounts

By boosting your working capital through invoice factoring, you may be in a position to benefit from supplier discounts, through bulk purchases and early cash settlement of purchase invoices.

 

Flexibility

The facility is flexible enough to permit you decide when you want, how often you want, as much as you want and for as long as you want. The debt is outstanding to your business so you have the freewill of deciding when you would like to recuperate it. You have greater control of your cash flow.

 

Grows with your business

Invoice finance is the only business funding solution that grows alongside your business. As the level of your sales increases, the amount that you can borrow also increases.

 

Collateral

Invoice factoring uses your outstanding invoices as the collateral for the factoring facility, rather than needing to use personal or business assets as security.

 

Business Planning

Invoice factoring helps business planning by making cash receipts more predictable. As funds are released almost as soon as invoices are issued, the uncertainty of when you will be paid is eliminated, making your cashflow forecasts more accurate and therefore more helpful for strategic planning.

 

Credit control

Invoice factoring arrangements generally include fully outsourced credit control. You can benefit from the factor’s experience in sales ledger management as well as from savings in costs and time from operating your own credit control.

 

No Debt incurred

Invoice factoring advances funds against your sales ledger. This means that no debt is incurred, as you are borrowing money that you are due to receive in the future, and no factoring debt appears on the balance sheet.