What are the advantages of Debt Factoring?

Debt Factoring has plenty of advantages:

Release funds tied up in invoices that can be used to boost working capital, fund new projects, pay wages and ensure payments to suppliers. Some companies using invoice finance can secure early payment discounts with their suppliers.

Flexible facilities mean that if the levels of income differ from month to month you are not unnecessarily penalised.

Unlike a traditional bank overdraft,there is no ‘maximum limit’ and the level of funding can be increased in line with the value of invoices you raise, there are no limitations to this.

Passing over the collection of payments owed to you to a Factoring partner will free up your time to concentrate on your core activities and can reduce the stress related to this process. You will never have to continually chase a customer for payment, as someone else can do this for you.

Other Funding Solutions

There are plenty of other solutions for your finances outside of the Invoice Finance market. The Alternative Business Funding market is currently growing rapidly, and is full of another extremely beneficial products for SMEs. A loan in its most simple form is a sum of money transferred to a company from a lender to be paid back over an agreed period of time, plus interest. These are useful for companies, as it can massively increase their available working capital, and therefore boost their cash flow. There are numerous options when it comes to Business Loans, with Secured and Unsecured being the main two choices. Asset Finance is another form of an loan, although this is more of an alternative form of funding, compared to the more traditional options. This type of facility is tailored towards allowing you to purchase assets that will benefit your business. You can purchase resources, plant, vehicles or equipment for your company. This is extremely beneficial, as said resources could give you access to works that previously you couldn't handle. The costs for Business Loans can vary massively, with anything between 1-30% interest being added. The costs added in the form of interest are dependant on the product you opt for, the strength of your company profile (such as your credit history, turnover, and profitability) and the amount of monies borrowed. This is calculated due to the level of risk the lender deems fit to your company. Again, the criteria for a loan-based product varies massively from lender to lender.

The basic criteria for a Business Loan are:

£100k turnover, unless you are a new start-up.

1 years trading history; Similarly to Turnover, start-up companies can get a financial product. Once you have filed accounts for the year, we can then apply you to our panel of lenders.

Due to us dealing with UK Based Lenders, we can only find solutions for UK Registered Limited Companies.

If you don't fit this criteria, it isn't the end of the road. Contact us, and one of our specialist finance consultants will guide you on whay your best options are.