Latest News

All about Factoring

All about Factoring

Here at Alliance Commercial Finance we are an experienced brokerage and offer an extremely wide selection of services for your business including, Trade Finance, Invoice Factoring, Confidential Invoice Discounting, Confidential Factoring and Asset finance to name a few. We work with over 25 various financial provides to ensure we provide the best matched factoring provider for your business.

We know how complicated the world of business finance can get, so we’ve aimed to break it down for you into four small and simple stages, making it easier for you to understand the basics of factoring and what we can offer your business both short-term and long-term.

We want you to understand two things:

  1. How easy it is to set up a factoring facility is for your business.
  2. What exactly is

 Stage 1

The first stage includes making an enquiry to either a direct funder or a brokerage like ourselves. The advantage of using a brokerage is the flexibility it gives you, as we can scour the market for the factoring provider that suits your business needs the best.

Once you make the enquiry – The broker/funder will have a basic understanding of your business and will provide you with a quotation. You will then asses the best factoring option for your business.

Stage 2

This step is one of the most important steps for you, as you will need to thoroughly consider which factoring option from your quotes is most suited to your business.

Here at Alliance Commercial Finance we will carefully help our clients make the right decision out of the choices of the factoring options for your business and advise them the best we can. To make sure you get the correct factoring option.

When choosing a funder, it is important for you to meet if you can or arrange a conference call to discuss your options further.

 Stage 3

Information such as creditors, debtors and your last set of accounts will need to be given to the funder.

 If you’re a start-up business, they will ask for information such as a business plan and client details. This information you provide the funders will help them to gain credit limits on your customers and to understand your new business venture.

The funder will then collect all of this information and produce a report to submit for the underwriter’s approval.

Stage 4

Dependant to the underwriter’s approval your funder will then sign the deal with you. Before the signing, your funder should go through all the legal documents with you and introduce you to your creditor controller. A credit controller is the person who will help you with day to day running of your facility.

In order to complete the process before the funder leaves they will want a copy of your up to date creditors and debtors and any outstanding invoices. In this moment the majority or all of your invoices will be verified and upon verification the funder will then release up to 85%-90% of the funds tied up in any of your unpaid invoices.

Setting up an Invoice Finance or Factoring agreement isn’t as complicated as you might of thought. Once you’re ‘live’ you can then use the funds released from your unpaid invoices to help with your business’s cash flow.

Want to find out more about your Factoring options? Call a member of Alliance Commercial Finance team on 01789 761374 and see how we can help your business today!


Added: 22 Sep 2016 13:37

Back To Blog