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Factoring Finance explained

Factoring is simply the ability of a business to raise cash against unpaid invoices. Typically 80 % funding can be obtained however depending on a businesses personal circumstances a higher payment or even a lower prepayment may be available.

Unlike invoice discounting factoring is provided on a disclosed basis which means that your customers are aware you are factoring your invoices. In fact you will add to your invoice a clause asking that payment for the invoice is paid direct to the finance company. Upon receipt the finance company will pay the remaining 20% due to you less their interest charges and fee for running the account.

Factoring can also provide full credit control leaving you free to run your business instead of worrying about chasing your customers for payment. It is important to remember that factoring is a value added product and is not just about providing a cash flow facility. What is the use of having the cheapest funder in town if at the end of the day they are hopeless at collecting your unpaid invoices. This is where a good independent factoring broker can add value to the decision of choosing the right funder

There  are many criteria that you should consider when choosing the correct factoring company for your business. If you are a new start business there are finance companies that are geared up specifically for this purpose. Also your geographic location should have a significant bearing on your decision as some of the smaller independent that can provide a n excellent service but  are very much locally based. also the nature of your business and the type and quality of your debtor book will also have a bearing on your final choice of factoring company.

There are plenty of companies to choose from and as such a good impartial view point will have alot of time and potential future heartache!

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XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

XL Business Finance, Eaton Place Business Centre, 114 Washway Road, Sale, Cheshire M33 7RF UK.

 

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