About Factoring

Factoring

Factoring is a way of raising money against your outstanding ledger. The process works as follows;

  • Deliver your goods or service
  • Send your invoice to the finance company and your customer
  • Receive up to 90% of the invoice value from your chosen finance company
  • Your customer pays the invoice 30-60-90 days later (as normal)
  • The finance company pay you back the remaining 10-20% of the invoice minus their fees (Typically less than 2%)

BDP can insure your debtors so if they go bust as long as you have a limit against them, your outstanding balance can be covered by insurance. This typically costs around 1% of turnover. Can be lower or higher depending on turnover, but the above is a good average.

  • Apply for a limit for any new or existing customers
  • The insurer will give you a certain limit to work within
  • If you trade within the limits and the client goes bust you will be covered by the limit they set.

Bad Debt Protection (BDP)

Bad Debt Protection (BDP)

BDP can insure your debtors so if they go bust as long as you have a limit against them, your outstanding balance can be covered by insurance. This typically costs around 1% of turnover. Can be lower or higher depending on turnover, but the above is a good average.

  • Apply for a limit for any new or existing customers
  • The insurer will give you a certain limit to work within
  • If you trade within the limits and the client goes bust you will be covered by the limit they set.
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