Factoring
Factoring can release up to 90% of the cash that is tied up in unpaid invoices. This releases cash to ensure the smooth running of your business. It means that you can pay suppliers and employee wages on time to avoid any unwanted disruption to your business.
However, not all factoring facilities are the same. Headline rates of costs and prepayment can be misleading and two factoring facilities with the same headline rates can be very different. You must be aware of any potential additional fees, tie in’s, penalties and also funding restrictions that can impact on the overall cost of your facility and also the cash that the facility generates.
This is where Smart Factoring Quotes comes in. We understand factoring and invoice discounting, after all this is all we do. We can guide you through the process to ensure you get the most cost effective facility that generates the cash that you require.
Factoring Benefits
Factoring offers several benefits to businesses and these are:
- Releases up to 90% of the cash tied up in your unpaid invoices. This is 90% of the gross value of your invoices.
- Factoring offers a credit control service which frees up your time to focus on growing your business.
- Factoring is typically flexible in that it grows in line with your sales, which reduces your risk of overtrading.
- It can also include bad debt protection which protects your business against the risk of non-payment.
- Factoring is typically a disclosed facility but confidential factoring is available from some lenders.
Factoring Criteria
The criteria for factoring can differ from company to company however all factoring companies have the same basic criteria. The basic criteria for factoring are:
- You should be selling your products or services to other businesses.
- You should be raising invoices for these goods or services on credit terms.
- Importantly the invoices should be raised in arrears of delivery of the goods or services.
If you can meet these basic criteria then there is a good chance a factoring facility is available for you. However, different lenders have different criteria over and above the ones detailed above. It is very important to partner with a lender that actively seeks businesses of your size, in your sector and in your geographic area. This will mean you are wanted and an important client that will receive the best levels of service.
Factoring Advice
At Smart Factoring Quotes we offer independent and impartial advice about factoring. It is our speciality and we are proud of what we achieve on behalf of our clients.
We consider your business and it’s unique requirements. Importantly we also consider your future plans and aspirations for the business. For example, if you are looking to grow the export side of the business it is pointless approaching a lender that will not consider exports.
By understanding your needs and characteristics and through our in depth knowledge of the invoice finance market we can recommend the best factoring company for your business. We aim to ensure funding is provided without restrictions in the most cost effective manner.
