Invoice factoring is the process of purchasing commercial accounts receivable (invoices) from a business at a discount.
Factoring involves full ledger management, which will leave you with more time to focus on your core business operations. Factoring products can be tailored to a wide range of business types, however offers a significant benefit to the following businesses:
- Limited companies, Sole traders and Partnerships
- Companies with rapid growth models
- Companies who are experiencing financial difficulties
- Companies with seasonal sales cycles, affecting cash flow
Factoring offers a range of Benefits:
- Immediately frees up cash by releasing up to 90% of the money tied up in unpaid invoices
- Improves cash flow allowing investment
- Eliminates internal invoice ledger management, factoring companies provide a full service including monthly statements
- More Funding - Allows borrowing beyond the levels of normal unsecured overdrafts, usually for a much lower borrowing rate
- Flexible Limits - Funding grows inline with your turnover, the more you invoice the more funding available