Factoring for Businesses – Does it work?
Amazingly, Factoring has been around since the 14th century, providing an early form of banking service to businesses looking to raise cash upon the promise of a future payment. In its most primitive form, Factoring was not big business, but in today’s commercial environment, it offers a vital life-line in an increasingly competitive and complex trading climate.
Factoring for businesses offers the opportunity to effectively ‘out-source’ their sales ledger to a funding company, helping them to release up to 90% of the capital tied up within their sales invoices. The Factoring supplier will then collect payments on your behalf through their credit control facility, releasing the remaining 10% minus a small fee, upon receipt of the outstanding payment from your customer. The percentage of capital released by a finance company will be dependent upon the chosen supplier and type of your arrangement and may, therefore, vary.
Businesses considering this method of funding should be aware that where a collection cannot be made by the funder’s credit control facility, for whatever reason, they will still remain liable for the funding released through the finance agreement.
Simply Factoring Brokers will work with you to make sure that you find a solution that exactly meets your needs and circumstances, leaving you free to run your business in the knowledge that your day-to-day sales accounts are being taken care of by a team of professionals dedicated to keeping your business moving.
Factoring allows businesses to out-source their debt collection and ledger management, without compromising on the quality of their service or having to turn to more traditional funding methods. Factoring works with your business as it grows meaning that you have the capital equity you need, when you need it. Unlike bank loans or overdrafts, Factoring is not static or constraining, but remains a flexible and fluid method of finance for your business.
What are the benefits of Factoring for my business?
- It is a quick and effective method of releasing equity tied up in your invoices
- It increases your cash flow and allows you to keep up with vital expenses and operating costs
- It allows you to out-source your credit control and ledger management, leaving you to concentrate on operations
- The funding available to you will grow as your business grows
- You can add bad debtor protection to your funding facility, providing peace of mind and stability
How can Simply Factoring Brokers help?
At Simply Factoring Brokers, we work with industry-leading suppliers of specialist Factoring solutions and can source the right product for you from a company that is trusted, reputable and experienced. We only work with funders that we know can perform for our clients and base our recommendations on a solid track record of finding successful Factoring solutions across a range of industries.
Our experience spans almost 20 years and in that time, Simply Factoring Brokers have helped hundreds of entrepreneurs to successfully grow their businesses, using Factoring solutions tailored to their needs.
For more information on Factoring and how we can help you to grow your business, free from the constraints of traditional financial solutions, speak to our team of specialist brokers by giving us a call.
We make your business our business.