FIRSTfactor
FINANCE
0845 643 4611
Working Capital Specialists

HISTORY OF FACTORING & CONFIDENTIAL INVOICE DISCOUNTING

Work capital for business

Factoring Companies are now universally accepted as vital to the financial needs of small and medium-sized businesses. In the UK the market is worth around £30billion per annum.

Forms of Factoring are said to date back about 4,000 years to the cradle of civilization, Bronze Age Mesopotamia, which included the Akkadian, Assyrian, Babylonian and the Sumer empires. Later it was the Romans who began selling promissory notes at a discount - yet another form of Factoring (still provided by Factoring and Confidential Invoice Discounting Companies today).

The first documented use of Factoring Companies is said to have occurred in America some time before the American Civil War, when animal furs, cotton, and even materials such as timber were shipped from the colonies to Europe using intermediaries or Factoring companies. Owing to the slow communication and transport of these times, to sell in another territory it was a necessity to appoint an agent in the territory to find the customers, sell and deliver the goods for the principal and hold the principal's goods on consignment. This was the beginning as Factoring and Confidential Invoice Discounting as we know it today.

Today Factoring and Confidential Invoice Discounting are one of the fastest growing areas of working capital for businesses. In 2010, worldwide demand for Factoring and Confidential Invoice Discounting grew by 20% to £1,648,229 million with International Factoring and Confidential Invoice Discounting growing by 35%. As International Trade continues to increase, so too do the opportunities for the Factoring and confidential Invoice Discounting industry. Because International Factoring and Confidential Invoice Discounting works in a similar way to domestic Factoring and Confidential Invoice Discounting, exporters have realised that it can help them to become more competitive in complex world markets.

While Factoring and Confidential Invoice Discounting is most suited for small and medium sized businesses, the trend continues that large corporations are seeking Factoring and Confidential Invoice Discounting services as well, replacing traditional overdrafts with the flexibility of a Factoring or Confidential Invoice Discounting service.

Factoring and Confidential Invoice Discounting is now universally accepted as vital to the financial needs of small and medium-sized businesses. It has the support of government offices and central Banks throughout the world.