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Quick facts about invoice finance

If you’re not sure what invoice factoring is, how it would affect your business, how it would affect your cashflow or what your clients might think then here are some facts that will answer all of your questions.


Factoring doesn’t require long term commitment –

With other traditional banking options or finance options you might be tied up to contracts that are up to 3, 4 or even 5 years long. If you need short term funding, then invoice finance is for you as it doesn’t require long term commitment.


Factoring is cost effective –

There is no need to keep renegotiating the amount that you factor which is time consuming and expensive which you have when you take out a loan, whereas factoring will grow organically at the same rate as your business expands.


Factoring isn’t like a loan –

With a loan, you will be borrowing money. Factoring advances money that you are owed from late invoices. Most factoring facilities will advance up to 90% of the invoice within 24 hours paying the balance to you after the payment from your customers has been collected. This means you will always have a positive cashflow, funds and working capital.


Factoring is used by thousands of UK business –

Over 40,000 business in the UK use invoice factoring to manage their cashflow and working capital.


Factoring allows you to choose what invoices are factored –

You might not need to factor all of your invoices; you only need to factor selected invoices. There is a selected invoice factoring option which allows you to choose which invoices to factor.


Late payments are damaging your business –

A lot of invoices allow you up to 30 days to make a payment, but too many clients pay a lot later than this. This is damaging your business and having a negative effect on your cashflow, with invoice finance you can up to 90% of your invoice paid to you straight away.

Added: 04 Jul 2019 13:11

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