What is Invoice Factoring?
Invoice Factoring
In really simple terms, Invoice Factoring is a way of selling your invoices to a debt factoring company or ‘funder’. The factoring company then instantly provides between 80-90% of the cash tied up in an invoice, so you can get back to growing the business with money in the bank.
Invoice factoring is a financing solution that enables businesses to access immediate cash flow by selling their unpaid invoices to a third-party company, known as a factor. This type of funding is an attractive option for businesses that need to overcome cash flow challenges and improve their financial stability. With invoice factoring, businesses can receive a cash advance of up to 90% of the total invoice amount, which can be used to cover operating expenses, invest in growth opportunities, and pay off debts. The factor then collects payment from the customer and returns the remaining balance, minus a fee, to the business.
The process of invoice factoring is simple and straightforward. The first step is for the business to submit their unpaid invoices to the factor for evaluation. The factor will then conduct a credit check on the business’s customers to determine their creditworthiness and the likelihood of them paying their invoices on time. If the customers pass the credit check, the factor will offer the business a cash advance of up to 90% of the total invoice amount. The business can then use the funds for any purpose they choose.
Once the factor has advanced the funds to the business, they will take over the responsibility of collecting payment from the customers. This means that the business no longer has to worry about chasing down unpaid invoices or managing their accounts receivable. Instead, they can focus on running their business and generating new sales.
The factor will typically charge a fee for their services, which is based on a percentage of the total invoice amount. The fee can vary depending on the creditworthiness of the business’s customers, the volume of invoices being factored, and the length of time it takes for the customers to pay their invoices.
Overall, invoice factoring is a flexible and convenient funding solution that can help businesses improve their cash flow and achieve their financial goals. With its quick and simple application process, businesses can access the funding they need to grow and thrive, without the constraints of traditional loans.
- Raise an invoice as normal when you make your sale
- Copy the invoice over to your funder or factoring company
- They’ll quickly verify the invoice before paying you up to 90% of the invoice total – instantly
- By boosting your cash flow this helps you to pay bills, invest in stock and expand your business
- Cut down the time you spend on credit control
How does Invoice Factoring Work?
How does Invoice Factoring Work?
- Raise an invoice as normal when you make your sale
- Copy the invoice over to your funder or factoring company
- They’ll quickly verify the invoice before paying you up to 90% of the invoice total – instantly
- By boosting your cash flow this helps you to pay bills, invest in stock and expand your business
- Cut down the time you spend on credit control
How do we help?
Our experienced team of independent factoring brokers are exactly that – independent. This means we’re not biased towards any particular lenders in the market. All of our decisions are based purely on which factoring company offers the best deal for you.
Phoning around to find the best debt finance deal is never the best use of your time as a business owner. Let us do all the legwork, take your ideas to the right people and tailor a solution to fit your business.
Simply Factoring Brokers specialize in simplifying the complexities of invoice factoring for businesses. They leverage their extensive network to connect companies with suitable factoring providers, negotiating competitive terms and rates. With expert guidance and streamlined processes, Simply Factoring Brokers ensure businesses access immediate working capital and optimize cash flow efficiently.
Their role extends to managing the entire factoring process, from initial consultation to finalizing agreements and facilitating seamless transactions. Handling paperwork and negotiations alleviates administrative burdens and enables businesses to focus on core operations. Simply Factoring Brokers are pivotal in helping companies navigate invoice factoring, ensuring financial stability and growth in competitive markets.
- We talk over your circumstances confidentially
- Within five minutes we’ll know whether we can help
- We scour the market on your behalf to find you the very best deal
- You then receive up to 90% of the value of an invoice the same day it is issued
No Hassle Factoring
No Hassle Factoring
- We talk over your circumstances confidentially
- Within five minutes we’ll know whether we can help
- We scour the market on your behalf to find you the very best deal
- You then receive up to 90% of the value of an invoice the same day it is issued