Following the traditional quiet period over Christmas many businesses may find themselves short of cash over the next few months. The good news is that it maybe possible to release cash against unpaid invoices using debt factoring or invoice discounting.
Factoring is available for just about any type of business that provides goods or services on credit terms. Factoring is available for new start businesses, businesses that have had trading difficulties as well as any blue chip companies. This kind of debtor finance is very useful for businesses that have maybe approached their own bank but for one reason or another haven’t been able to obtain funding.
Invoice discounting is traditionally provided in a confidential facility and as such your business has to be stronger and more established to be eligible. Again invoice discounting can release cash against unpaid invoices and provides a very useful working capital facility.
Both factoring and invoice discounting are provided by banks and independent lenders. In our opinion independent lenders are far better at providing factoring because credit control that is provided with factoring is a very important aspect of the service. Independents that specialise in factoring tend to provide a much more comprehensive service and as such the cheaper banks isn’t always the best option
Tags: debt factoring, Factoring
