Factoring Infographic – A new take on understanding how factoring works
by Touch Financial - Posted on 5 May, 2011
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Against the grim backdrop of tightening lending practices and the ever increasing criteria of traditional funding options, a large number of the SMEs within the UK are still unaware of factoring and how it can act as a supplement to improving the cashflow conditions of their business.
Therefore, in providing SMEs with some significant facts and information as well as simplifying the processes of Factoring, a guide designed by Touch is created using the forward thinking approach of Infographics. “The guide simply gives a clearer understanding of how best to utilise possible cashflow sources,” said Simon Carter, Director of Touch Financial.
By any measure, ascertaining credit in today’s market can be a considerable feat, as Simon went on to explain: “Financing is available, SMEs just need to know where to look. For instance, factoring is a type of cashflow funding that allows businesses to receive money from unpaid invoices.”
“The more invoices a company generates, the more cash it receives, so the facility really rewards growing businesses and encourages growth rather than holding it back.” Therefore, as such, Factoring is ideal for SMEs ambitious to expand.
He added: “Having cash up front enables businesses to pay their suppliers more promptly, negotiate better terms and take full advantage of supplier discounts for early settlement. Also, with factoring, the credit management side, including collections is taken care of by the lender, allowing businesses to get on with doing what they do best.
“What is more, an invoice finance arrangement with a lender can also include valuable credit protection, shielding clients from the risk of debtors who are unable to pay due to financial difficulties or insolvency.”
With little differences between the cost of the invoice finance facility and that of an overdraft, businesses using Factoring can take advantage of, on average, two times more cashflow than an overdraft for clients with tangible security, and four times more cashflow for clients without.
Every month Touch Financial help businesses improve their cash flow with invoice finance. Request a quote to find out how much extra cash you could raise.Get a quote >