Benefits to your Business

In an ideal world, your customers would pay promptly for the services or goods you have provided to them, leaving you to concentrate on expanding your business and becoming more successful.

As many businesses, particularly small to medium-sized ones will testify, that isn't always the case, and slow payers can have a damaging impact on your business.

Factoring and invoice discounting, as described elsewhere, can improve your cash flow by releasing money as soon as you have completed an order and raised an invoice for the order.

That saves you having to wait for your customer to pay. It's a commonly-used way of helping finance restructuring or expanding into new areas.

In many ways, it works better than a traditional or conventional loan because it is linked to sales - therefore reflects exactly how your business is doing at the present time.

Businesses which have successfully set up factoring systems have found that the confidence which comes with knowing when money will come in makes for a better relationship with their suppliers.

Although there are costs involved in factoring - after all, you are getting someone to do some of your work for you - there are savings to be had.

For example, you have no need to employ sales ledger management in-house, and the guaranteed timing of income can help secure early settlement discounts with your suppliers.

But possibly the greatest benefit is flexibility.

The more you invoice, the more you get. With many factors offering high advance rates, you could also get on top of your outstanding debts more quickly, such as bank loans.

Each factoring agreement is tailor-made for the business signing up, and unlike uniform bank loans, is much better placed to suit your needs.