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• 13 Apr

  Money Factoring

  

  Receivables finance is a sector that is awash with jargon, and one which uses all sorts of different terms (synonyms) to describe the same thing. The other day I was asked "what's money factoring?", it's a phrase I have never heard used before, but one that is easily explained.

  Money factoring is just another term for the financial service called debt factoring. It enables companies to release cash from unpaid debtor invoices whilst outsourcing the credit control for those invoices to a factoring company (also called a factor).

  Unfortunately, the same term is used for the mathematical process of finding the factors or a number. You can read more about that here: Mathematical Factoring.

  Money Factoring

  Returning to financial, or money factoring, there are a number of different product types that all offer different services to the user. These are set out and explained in our Factoring Guide, which also has comprehensive details of how the service works, what it costs and what the qualification criteria are.

  Available Regardless Of Financial Situation & Trading History

  The great thing about these particular financial products is that they can be made available to companies regardless of their financial situation. You don't need to have a trading history, be profitable or have a clean credit record - as might be required for a business loan. We have found this type of finance for companies with CCJs, those in CVAs and even those where the Directors have been previously bankrupt.

  The reason for the more relaxed approach is that the facility is based on the strength of your debtors and the underlying transactions. If you sell a simple product or service, that can be easily evidenced, you will be an ideal candidate for factoring.

  With regard to your debtors, even if they are not top quality it doesn't matter providing you deal with a good number and have a spread of customers. Factors will take comfort from the fact that not all customers are likely to fail to pay at the same time - so providing you have a spread on your sales ledger they will still be able to provide finance.

  By Glenn Blackman