Factoring
Factoring is an excellent option to help new and growing businesses and can take away the stress of chasing customers for payment, whilst providing you with up to 90% of invoice value straight away.
]Is Factoring right for your business?
- Do you trade with other businesses?
- Do you have an annual turnover of more than £50,000?
- Do you issue invoices with credit terms from 14 to 90 days?
- Are you a start-up business with a strong business plan and order book?
- Are you a ‘phoenix’ business re-starting after a pre-pack arrangement?
- Are you and your business looking to grow and need more working capital?
If the answer to these is yes, factoring is an option for you and can release working capital immediately by providing up to 90% of the invoice value in your debtor book. And whilst you will have to re-negotiate your overdraft at least annually, and more often if your business is growing, with factoring the funding levels automatically grow alongside your business without the need for continual re-negotiation, giving you a quick and easy way to free up funds.
How does factoring work?
You raise an invoice and send it to your customer, then update the invoice finance company online or send copies on to them:
- Up to 90% of the invoice value is then made available to you straight away
- The factoring company gets payment from your customer, sending out monthly statements and reminder letters in line with payment terms
- Once payment is received from your customer and has cleared the balance less fees is sent to you
What are the benefits of factoring?
With bank overdrafts on the decline, especially for new and recently established businesses, factoring is seen by many as the quickest and easiest way of freeing up money, helping unlock money tied up in invoices and giving your business the flexibility to grow:
- Improved cashflow – you won’t have to wait for 90 days for payment
- Up to 90% of invoice value available
- It includes an option to add in bad debt protection to protect you from failing businesses
- It takes the stress and cost of credit control away from you and allows you to concentrate on growing your business
- You will be able to make use of professional credit controllers within the factoring company, with a dedicated credit controller for you business
- Quick access to finance – it is possible to get funding in place in less than 7 days and in many cases within 3 to 4 days at most
- Online access
- No need to change day to day banking
- No need to provide direct security over your home or other property assets
Touchstone offers a free initial assessment on all our services. To find out more about how factoring can work for you and your business, or to review your current factoring arrangements, contact us for more information now, either by calling us on 07595 219921 or filling in the following :
