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Confidential Factoring Explained

Most business understand invoice discounting and most businesses understand full factoring. However confidential factoring maybe available to businesses that require or would prefer a confidential facility.

At a time when many businesses are still struggling for cash the financial institutions have tightened up their criteria as to who qualifies for confidential invoice discounting. A business would need to be well established and have a profitable trading history. The finance company has far less control with an invoice discounting company because they are unable to verify all the invoices and as such it is potentially open to fraud via fresh air invoicing. Factoring which is just about available to any type of business providing you haven’t previously defrauded a factoring company. The factoring company is able to phone your customers to verify invoices and because they also chase payment on your behalf they have a much greater degree of control.

Confidential factoring however provides a solution that provides a compromise for the business and the funder. With confidential factoring the finance company provides the business with their own dedicated phone line and credit controller. They chase the debt in your business name and if any of your customers call for the credit controller the company will answer in your business name. Any funds collected are paid into a trust  account in your name and as such the finance company can exercise a reasonable amount of control. Hopefully this will give you the confidentiality that your business desires.

This is a relatively new product and as such anyone that has had any experience with confidential factoring we would be very interested to hear your opinions.

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