Bad debt factoring can provide the financial freedom of releasing cash against unpaid invoices, a full credit control function and bad debt protection rolled into one! Ninety percent of businesses go out of business because they run out of cash and not because they are not profitable. In the current economic climate it make sense to out source your credit control to leave you free to concentrate of running your business. If your business has a turnover of circa £100,000 your business will probably be eligible for funding.
Factoring will release up to 90% of your unpaid invoices immediately therefore if you have outstanding invoices of £1.0m it may be possible to release £900k immediately. It doesn’t matter how long the business has been trading or the financial condition of the business there is normally a business to suit your particular circumstances.
A full factoring facility will start from as little as a couple of hundred pounds per month. Be beware however not every factoring company is the same. Banks for example will only chase your top few customers by phone relying on the post to chase your remaining customers. Other factoring companies will chase every single customer by telephone and as such are they are better at collecting your invoices. They will give you the best cash flow. These finance companies can be more expensive but they can potentially add more value to your business.
Bad debt protection or on recourse factoring can also be added for a premium. Again different finance companies are better than others at providing bad debt protection. Different funders use different means to provide bad debt protection and the limits they are set are based on the credit insurance companies providing limits for you customers. In order to find out which finance company is best for your business give us a call for an independent assessment.