Because invoice finance is linked to sales then the facility is ideal for funding growth by providing immediate working capital.
A key advantage of factoring is flexibility. The amount you can borrow grows in line with sales and it is often possible for you to repay bank facilities and release previously pledged security.
How much can I borrow with a factoring facility?
Typically, within 24 hours of the factoring facility being set up you can borrow up to about 85% of the value of your approved invoices. The remaining 15% is paid to you, less a small service fee, once payment is received from your customer. Once the invoice finance facility is established, the level of advance you receive against invoices depends on a number of issues, but can rise as high as 100%.
Once the factoring facility is in place, there is no limit to the amount you can borrow as the level of finance is directly linked to the level of sales. So as your business grows so does the amount of funding available to you. This is in sharp contrast to bank overdrafts, which require regular re-negotiation and arrangement fees.
How much does factoring cost?
There is NO CHARGE for our brokering service.
Factoring and invoice discounting services are tailored to your business so the fees will depend upon your specific needs.
There are two types of fee. The first is the cost of the money you use, which is extremely competitive when compared with other forms of finance. The second is a service fee.
Small additional charges are often made for extra services as required such as credit insurance.
Invoice finance helps improve cash flow - try our FREE brokering service At Strategy Consulting, we have a wide knowledge of the players in the market, and know who is hungry for business and who are specialists in certain industries. Our FREE factoring broker service puts you in direct touch with UK invoice finance companies who may be able to assist your business.
Summary of the benefits of factoring:
• Improves cash flow by immediately releasing up to 85% of funds against the value of outstanding invoices • Gives you access to an ongoing supply of cash that grows as your sales grow • You work with a dedicated team of professionals who will prepare and send out statements, telephone all of your customers, collect payments for you and maintain professional and detailed accounts of your transactions.
• Management time is freed to drive the business forward as they are no longer spending time on unpaid accounts and they are no longer held back by insufficient cash flow.
• By making use of a factoring facility you can benefit from improved profitability as you can pay suppliers earlier, buy in larger quantities and take advantage of any volume discounts.
What is Factoring - To learn more about this author, visit John Courtney's Website.
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When it is time to pay the bill it is time to pay the bill. When it is time to make payroll, it is time to make payroll, when it is time to pay taxes, the man does not wait.
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John Courtney
(Visit John's Website)
Strategy Consulting Limited is a small,
specialist Management Consultancy for
SME's in the UK assisting with business
strategy, funding, business planning,
marketing and internet.
Clients range from start-ups, though to
small family firms with a turnover in
excess of £1 million and up to
International companies turning over £100
million plus.
The Chairman of Strategy Consulting
Limited, John Courtney has been a Company
Director for over 20 years, including many
years as Chairman or Managing Director in
his own businesses which have ranged from
sporting goods to agricultural chemicals.
He has been a Non Executive Director for
several SME's.
John has trained at The Academy of
Business Strategy, and is an associate of
the Institute of Management Consultancy,
and a member of the Institute of
Directors. He is also a visiting lecturer
on the MBA course at Cranfield University
School of Management. John has run
training seminars at board level on
corporate strategy and made presentations
to both large and small groups on funding
strategies.
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