Invoice Factoring Services
 

Invoice Factoring
Services

Three Main Types of Invoice Factoring

Recourse Factoring

Recourse factoring is where the invoice factoring company advances funds against invoices (invoice funding or financing) and manages the sales ledger, issues statements, chases the debts and collects payments from your customers.

Non Recourse Factoring

Non recourse factoring is the same as recourse factoring but has the added advantage of bad debt protection. You can cover all of your customers or be selective, the choice is yours. Normally 100% cover is provided subject to a first loss of £1,000.

Confidential Factoring

Recognising that factoring invoices using brokers still has negative connotations for some businesses, one or two factoring companies are now prepared to offer a confidential invoice factoring and discounting service. You will still receive up to 90% cash against invoices plus sales ledger administration and debt collection but the statements and any calls will be made in your name, not the factors. Your customers will not be aware of the factors involvement.

Benefits

All three factoring services include these benefits:

  • Receive up to 90% cash against invoices within 24 hours
  • Sales ledger administration
  • Debt collection

What does it cost?

It depends on how much work is involved in handling your business.

The cost will vary depending on a number of factors, such as:

  • Your turnover
  • The number of customers you have
  • How many invoices you issue each month
  • What is the level of returns/credit notes

The best guide is a service charge of 0.5 to 2% of turnover, including Vat and a borrowing cost of 2% to 3% over bank base rate. Bad debt protection will add 0.3% to the service charge.

Factoring Consultants

In order to get the best factoring agreement and avoid the pitfalls of a poor invoice factoring deal use our factoring consultants service.

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