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How does confidential factoring work?

Confidential factoring gives a business the same benefits of a full credit control service however the facility is set up in a way that your customers will be unaware that you are factoring your debts. Businesses which have been used to invoice discounting but  have been experiencing difficult trading conditions may find that their banks are pushing them towards a full factoring service.

Invoice discounting is perceived as a more risky funding product as the finance company do not phone your customers to chase your debts. They leave it down to you and therefore you must have good credit control systems in place. In difficult times it is more likely a struggling businesses will try and put through fictitious invoices. With a factoring facility there is less chance of a fraudulent transaction because the finance company has a better control and understanding of your debts.

Confidential factoring could just be the facility that gives you the best of both worlds. It basically works by the finance company giving you a dedicated credit controller who will chase debts in your business name. Your customers are also given a unique telephone number which is answered in your name. As and when monies are collected they are paid to a trust account. By doing this the finance company maintains a far greater control on your financial matters and therefore they are at less risk. You as a customer is happy because you maintain the confidentiality which maintains your reputation and status with your customers.

At the time of writing this blog we are  aware of only one finance company that provides a confidential factoring product.  Most businesses are unaware that such a product exists and again we can use our expertise and experience to make sure you get the best possible funding solution for your business.

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