FIRSTfactor
FINANCE
0845 643 4611
Working Capital Specialists

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SMALL BUSINESS FACTORING

Many businesses are constrained as the result of both insufficient and inappropriate funding

The type of Factoring you require can be tailored to your specific circumstances

When expanding your business you often cannot afford to wait 30 to 60 days to get paid by your customers. Even more frustrating can be quality customers dictating or fluctuating payments dates disrupting predicted cash flow. Waiting to be paid by your customers can be very problematic, especially if your business is growing quickly and cash flow is stretched.

If you are contemplating starting a business and searching for working capital options or you have recently formed one and experiencing cash flow constrains Factoring may be the answer.

If you need working capital financing, you will also find that getting a bank loan or overdraft is extremely difficult or close to impossible, especially if your business is small or new even if you are an independent professional firm. However, there is another option. It is called Factoring, and it is available to small business owners and even new start companies, sole traders, partnerships and limited companies.

Small business Factoring provides you with

The type of Factoring you require can be tailored to your specific circumstances

An instant source of ready available working capital, it turns your outstanding debtor book into an immediate source of working capital instantly. The more you invoice to credit worthy customers the more the facility releases allowing your business to grow. You can use the money released from Factoring to pay rent, meet payroll, pay suppliers or just capitalise on new sales opportunities.

Depending on the nature of your industry, credit terms you give to your customers and how creditworthy your customers are, a business can usually obtain between 80% to 90% and sometimes 100% of outstanding invoices. The balance returned to you when the customer pays less the invoice Factoring-financing fee. Best of all you can choose as and when you use the additional working capital.

The type of Factoring you require can be tailored to your specific circumstances. Examples of available services:

  • Single customers

  • Single invoices

  • Whole sales ledgers

  • Domestic, export or combined sales ledgers

  • Stage payment invoices

  • Factoring with bad debt protection

The benefits of Factoring

Factoring can help your business improve its cash flow without adding to its debt.

  • Ensures your cash flow keeps pace with your anticipated growth in sales

  • Enables you to develop new markets with confidence, if you have opted for a facility that provides bad debt protection

  • Improve decision-making on new business

  • Generates immediate access to cash flow to fund further sales, market for additional business

  • Provides you the ability to offer extended terms

  • Delivers the convenience and competitive advantage of being able to offer open account terms

  • Meet tax requirements on time as they fall due

  • Reduce administration costs

  • Purchase capital equipment

  • Pay your suppliers faster and take advantage of discounts

  • Reduce bad debt with streamlined credit approvals for new customers

  • Win the battle against slow-paying clients

How flexible is it? Factoring is extremely flexible; it depends on your specific requirements. You choose to Factor as much as your want or as little as you want.

Factoring Services

  • Single customer Factoring can be used when you have a large concentration of sales to one customer. A recruitment consultant who specialises in the health care sector may have all of their sales to the National Health Service for example

  • Single Invoice Factoring can be used when you have a large one off order. It is designed to provide you with piece of mind that once you have fulfilled an order and raised an invoice the customer is pre-approved for financing. The service can be switched on and off as required without being locked into lengthy contract terms. This offers the maximum in flexibility and can be utilised alongside more traditional forms of finance

  • Whole sales ledger Factoring is the most traditional and well know service. It is a service that has grown in demand over the last 20 years, as its benefits have been realised buy businesses across the world. A Factoring company will take the whole of a company’s sales ledger and provide a term facility. This form of Factoring is utilised by firms that are experiencing a growth phase and are typically undercapitalised or have identified they want to have flexibility within their working capital to cope with unforeseen events like winning a large order. The Factoring company accepts invoices on a continuous cycle as and when you raise invoices

  • Factoring can be provided for domestic, export or a combination of the two. Pushing into new markets can be a tricky undertaking languages. Legal systems and time zones make a long-range collection difficult. Specialist Factoring services for exporters can be an invaluable service

  • Specialist services are also available from Factoring stage payments to incorporating stock finance services. These can all be incorporated into a invoice financing facility

  • Debtors can be covered by a bad debt protection. Therefore, once you raise an invoice to a pre-approved debtor, if your customer does not pay the Factoring company will pay you. This provides the ultimate in piece of mind that once a sale has been made you are guaranteed to get paid

By Factoring your invoices, your business can have immediate access to cash and working capital to promote rapid growth and fund new business ventures without incurring any debt.

Why is Factoring right for you?

Best of all it won’t cost you a penny………

Single customer Factoring can be used when you have a large concentration of sales to one customer.

Factoring in the UK and Ireland since the banking crisis has been one of the most sought after methods of business financing that immediately improves the cash flow of businesses. It can be utilised by a wide range of industries including staff recruitment, security guards, manufacturing, transport, accounting, steel stock holding and cleaning companies etc.

Just as every business is different, every Factoring Company is different. The UK has a diverse selection of Factoring Companies and as Banks continue to restrict the access to working capital new entrants are coming into the Factoring market with innovative products and services. We can help you get the most suitable Factoring service at the best rates, that meets your needs.

Call us today to chat through how we can help you.