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• 31 Mar

  Invoice Factoring Services

  Invoice factoring services are forms of business receivables financing that can deliver many benefits, depending on the exact type of product that you choose to use.

  See our Guide To Factoring for more details about the operation of these products and the differences between the various offerings on the market.

  Purpose Of Invoice Factoring Services

  

  These are the purposes of using invoice factoring services and the benefits that can be derived from business factoring services.

  They can:

  • Improve cash flow and increase working capital by receiving funding against some, or all, of your invoices to customers
    
    
  • Reduce or remove the need to employ credit controllers
    
    
  • Improve your debt turn (the speed with which customers pay)
    
    
  • Limit the impact of bad debts (non-recourse facilities)
    
    
  • Keep the fact that you are using a facility confidential so customers are not aware (confidential facilities)
    
    
  • Handle the collection of invoices to overseas customers (export options).

  What Are The Different Features?

  There are a variety of factoring product features that will determine the exact nature of the service that you will receive, however in general all the products deliver two key features as a minimum:

  1. Funding - against your unpaid sales receivables
     
     
  2. Invoice collections - a credit control service (which can be provided under your branding so debtors are unaware)

  Other features (see the list of benefits at the top and the link to our article about product types) can be added on when required.

  Explaining The Product

  The following video gives a brief explanation of this product: Invoice Factoring Services

  You can find further explanatory videos about these products here: Factoring Videos.

  How Much Are The Fees?

  The fees will depend upon the features that you choose to use, your situation and the provider (also called a factor) that you choose. The way that the fees work also varies between different offerings. We have put all the information about pricing into our article about factoring fees, which includes examples of what you might expect to pay according to the size of your business. Please be aware that there can be large differences in the quotes provided by different organisations.

  Who Can Qualify?

  The good news is that any company that raises invoices to other businesses, on credit terms, is likely to be able to qualify for a facility. You do not need to have a strong financial position as the funding is predicated on the strength of your debtor accounts receivable.

  Who Offers These Services

  There are over 100 different receivables financing providers in the UK. Many of those will have multiple product offerings, so there are hundreds, if not thousands of different facilities available in the UK. The providers range from large high-street banks to small independent factors. Each has its benefits and an individual risk appetite. Some are members of UK Finance, which is a trade body for the sector.

  How Do I Access Invoice Factoring Services

  We can help you find invoice factoring or financing services, apply online using the form on this page or feel free to call Sean on 03330 113622 and he will take you through the available options, to help you find the most appropriate invoice factoring services for your company.

  By Glenn Blackman