Invoice Factoring Solutions from UK Specialists
Many smaller businesses do not tend to have a credit control department so it is often left to the owner to chase up unpaid invoices. You would probably prefer not to have to do this as you tend to be busy enough running other parts of your business operation. However, debtor monies owed have to be collected otherwise the business may cease trading.
One alternative is Invoice Factoring. You will quickly find that there are a number of companies offering a factoring service such as many of the banks.
How does Factoring work?
Quite simply, you would issue your invoices in the normal way but not have to wait for 30/60/90 days before being paid as you receive an advance from the factoring company based upon a percentage of the value of the unpaid invoices (up to 90%) sometimes within 24 hours of the invoice being issued. You leave the factoring company to chase up any unpaid invoices. When the factoring company receives payment of the invoice, the balance is paid to you less their service charge based upon a percentage of the invoiced amount. A “bad debt protection” scheme may be available as an option to ensure that if one of your debtors becomes insolvent you will be 100% protected. So, as you can see, the factoring company is your credit control department.
There are various fees payable to the factoring company such as an arrangement fee, service charge, discount charge (a percentage of how much is advanced to you), a review fee if you wish to continue with the facility for a further 12 months, security fees and a fee for the “bad debt protection” scheme.
The above could free up time for you to concentrate on growing your business in the knowledge that you should not have any cash flow issues caused by customers not paying your invoices by the due date.
Why not give us a call to get some Free, Impartial advice about Invoice Factoring
By contacting us here at Connect Commercial Finance we can quickly put you in touch with a specialist who will explore with you whether Invoice Factoring is right for your business. If it is, he or she can help find the most suitable provider from the many financial institutions offering such a service.