Business Debt Factoring Overview and How It Works

Is your business being severely affected by customers delaying payment on their invoices or indeed not paying them at all? Is this in turn affecting your ability to pay your staff and suppliers or order new stock? Do you need to raise additional business finance and stabilise your cashflow?

You could of course apply to the bank for an overdraft or loan and land yourself with excessive interest fees and penalties, should you be accepted. However, it is unlikely that this will solve our particular financial problems.

Arguably more appropriate would be a Business Debt Factoring service. By contacting Touch Financial, we could put you in touch with one of our selected third party Factors who will be more than happy to offer their advice and set you on the road to recovery.

Compare factoring quotes instantly online >>

What is business Debt Factoring?

At the moment, you invoice your customers and then wait and hope they will pay you in time for you to be able, in turn, to pay your suppliers. If they don’t, then you find yourself robbing Peter to pay Paul, incurring penalties along the way.

With business Debt Factoring, once you have invoiced your client, your Factor will then release up to 90% of the total invoice amount to you, often within 24 hours. In many cases they will also agree to take over the responsibility of chasing late customer payment. Their years of experience, high levels of communication skills and the fact they are a third party debt collection agency means they have an excellent rate of success in collecting outstanding debts. Once the customer has paid the debt in full, they will release the remainder of the balance to you, minus their service charge, which is usually a percentage of the invoice total.

In this way, money continues to flow into your business, you are able to pay your bills as they fall due and you are spared the time and wasted energy spent chasing customers all day for payment. You can get on with the important tasks of managing staff, ordering stock and maintaining sales figures. And, as the business expands, so does the funding available to you. Unlike banks and other financial lenders, we believe in working with you to grow the business, not just lending you money and watching the interest payments roll in.

Will I be accepted for Business Debt Factoring?

We don’t need to see your balance sheet or profit and loss statements. We won’t even run a credit check on your business. Your potential third party Factor will simply look at the outstanding invoices that you have and run credit checks on those customers. That’s all you need to do, provided you:

  • Have a turnover of at least £50,000 per year
  • Are based in the UK
  • Issue credit terms of 30-90 days

Who is Touch Financial?

Touch Financial is the UK’s leading online commercial finance broker. We are completely independent and our free, confidential advice is impartial. Working with around 20 of the best Factoring agents in the UK, including Lloyds TSB Commercial Finance, Royal Bank of Scotland and Bibby Financial Services, we guarantee to find you the most appropriate financial solution for your particular business needs and challenges. Our services are free and we may even be able to arrange an agreement between you and a Factor within 24 hours. We can negotiate special terms and rates to help you grow your business, so contact us today on 0845 388 9725 or compare quotes instantly online.

Compare quotes instantly online >>

Also in this section:

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 >