What You Need To Know About Business Factoring Services

Invoice Factoring is an extremely useful commercial tool that’s available to most UK businesses. It allows you to release the cash that’s tied up in your unpaid invoices, enabling you to keep on top of payments to creditors and fuel the growth of your business by having more cash readily available.

Who offers Business Factoring Services?

There are over 60 Factoring providers in the UK, each specialising in different industries, turnover levels, service levels and geographic location of their customers.

When looking for a Business Factoring service provider it is important to understand that some lenders will try and ‘crowbar’ your business into using their service even though it may not be the best solution for your business.

When selecting a cash flow solution like Factoring it is important you find the right solution which meets the needs of your business. Price is not the only influencing Factor when it comes to selecting the right provider, service levels also play a big part, after all what’s the point in having a Factoring facility if it takes your account manager a week to release your cash?

At Touch Financial we work with over 20 of the UK’s leading lenders and have access to favourable rates as well as a ‘try before you buy’ service allowing you to test the service for 28 days with no commitment.

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Who can use Business Factoring services?

Factoring is all about unlocking money from your invoice debtors. That means it’s only suitable for businesses who offer credit to their customers.You could be eligible to use Invoice Factoring if your business:

  • Turnover in excess of £50,000 per annum?
  • Offers credit terms of between 30 and 90 days?
  • Customers are primarily other businesses?

If you can answer ‘yes’ to the three questions above then your business could benefits from using Business Factoring services.

How does Factoring work?

Factoring releases cash into your business by eliminating the time it takes for customers to pay you. Here’s how the process typically works:

  • You supply goods or services to a customer.
  • You raise an invoice for the supply, passing a copy to the Factoring provider.
  • The Factoring provider pays you up to 90% of the invoice value within 24 hours of receiving the invoice.
  • All credit control processes, such as producing statements and chasing payment, are performed by the Factoring provider.
  • The customer pays the Factoring provider.
  • The provider pays you the outstanding balance less a small service fee.

Your business benefits from immediate payment of the majority of the invoice value, while the Factoring provider carries the risk of the customer paying late.

There is a fee for the service, and because you are borrowing money interest will also be charged. However, this is usually at a competitive rate.

Finding the right Business Factoring services provider

If you want to know how much your business might be able to unlock from its sales ledger why not get a quote online now?

Touch Financial is the UK’s leading online Invoice Finance broker. We have a team of Factoring experts dedicated to helping businesses find the right finance solution. Thousands of organisations have already benefited from our expertise acquired through years of experience. If you’re facing cash flow issues and need impartial advice, get in touch with us today.

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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.

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