Better know as factoring can be also be known as Debtor Finance, Invoice Finance, and Invoice discounting. No matter what they call this facility, its getting an advance on outstanding debtors. As a result business owners can avoid cash flow issues in Growth.
Factoring is not a collection agency, so you can collect on bad debt! Factoring companies, advance a percentage of the invoice, normally up to 80%. This is for one main reason. If there is a none payment, secure out of the retention of 20% per invoice remaining. This giving the lender some security.
Factoring can be a strong source of cash flow for growth. Imagine if you could get access to 80% of your debtor book in 24 hours.
This could give you an advantage in buying power, putting on more staff, paying bills ahead of time for discounts, and flood the market with your products for extra growth.
Factoring is more expensive than traditional bank lending. However you pay for risk. Bank lending is often ridged. It doesn’t move fast with your growth. Banks wont look at a business under two years old. And needs security of property in most cases, and takes time to get organised.
Factoring needs only a debtors ledger. Lenders need verified completed work and a range of debtors. It doesn’t matter if your a new or old businesses. Debtor Finance lenders will look at businesses with tax arrears, no securities, and most industries.
Price wise, Factoring works out to be around 3% per month. So organising of growth and margins is essential. Most business owners agree, that in order to grow they need money, to sacrifice some margin to get bigger is never the issue.
A Factoring facility to run your business for you. It asks for reports at the end of the month for reconciliations, it liaises with owners on new debtors and debtor limits, and assists sometimes in collection of larger debts.
Factoring can be a very powerful tool in business if used correctly. Trade Debtor Finance Consultants has been around since 2009 with 28 different lenders to choose from. Best of all you will receive an obligation free quote, in writing, with up to 4 options that suit your business, at no direct cost to your firm. Want to find out more about Factoring, speak to the experts today. 1300 00 8332 or firstname.lastname@example.org