As with any form of funding, there are a few things to bear in mind when invoice factoring to make sure that it is the right solution for your business.
Here are our top tips:
Make sure that you understand the fees: When invoice factoring, you will be charged fees for the service. It is important to make sure that you understand these fees and how they will affect your overall costs before you enter into any agreement.
Check the small print: It is also important to read the small print of any invoice factoring agreement carefully to make sure that you are clear on the terms and conditions. This will help to avoid any surprises further down the line.
Factor invoices from creditworthy customers: To make sure that invoice factoring is effective for your business, it is important to factor invoices from creditworthy customers who are likely to pay on time. This will help to reduce the risk of late payments and bad debts.
Use a reputable company: When choosing an invoice factoring company, it is important to make sure that you use a reputable and experienced provider. This will help to ensure that the process runs smoothly and that you get the best possible deal.
Invoice factoring can be a great way to improve your business’s cash flow and access working capital. However, it is important to make sure that you understand the process and the fees involved before you enter into any agreement. By following our top tips, you can make sure that invoice factoring works for your business.
If you would like to find out more about invoice factoring and how it could benefit your business, get in touch with Simply Factoring Brokers today.
–Case studies: businesses that have used invoice factoring successfully
Invoice factoring can be a great way to improve your business’s cash flow, but how does it work in practice? We’ve put together some case studies of businesses that have used invoice factoring successfully to give you an idea of how it could work for your business.
– A manufacturing company: The company had a long-standing invoice factoring facility in place which they had used on and off for several years. The company was experiencing some financial difficulties and so decided to increase their use of invoice factoring to help improve their cash flow. The invoice factoring company advanced them up to 90% of the value of their invoices, which helped to ease their cash flow woes and allowed them to keep trading.
– A construction company: The company had been invoice factoring for several years and had found it to be a helpful way to improve their cash flow. They had recently secured a large contract and so invoice factored their invoices from the project to help meet the increased demand on their cash flow. The invoice factoring company advanced them up to 90% (you will never get advanced 90% in construction as they raise applications, so 60 maybe 70% the value of their invoices, which helped them to keep on top of their finances and complete the project successfully.
These case studies show how invoice factoring can be used effectively to improve cash flow. If you are considering invoice factoring for your business, get in touch with Simply Factoring Brokers today to find out more.