Invoice discounting / Invoice factoring
The most common source of working capital for a business today is via invoice finance or as it more commonly known, invoice discounting or invoice factoring.
Simply put, cash is advanced against your sales invoices at an agreed rate with the balance payable upon receipt of payment. This is a facility to ease cash flow by providing money upfront for invoices due.
Using an invoice discounting / invoice factoring facility is simple and can help your business to grow because as sales increase so does the available finance. The facility grows in proportion to sales achieved and it is a more flexible facility than a bank overdraft.
It is now possible to selectively finance a single debtor. This is useful where large orders are concerned and the bank will not extend sufficient working capital to enable the order to be taken on.
As the market for invoice factoring has developed, more and more complementary products have been added alongside standard facilities. It is now possible to have cash flow loans, business stock finance, business trade finance and bad debt protection, as part of the financing package.
There are numerous bank invoice discounting / invoice factoring facilities available in addition to the independent providers but which one is right for you?
We will source and advise on the type of facility which may be appropriate to your circumstances. Alternatively, if you are already in a facility but are unhappy with the provider we can advise on the relative merits of moving to another provider. Contact us for details or call us now on 0800 694 0484.