Factoring Quote

Whether using an Invoice Factoring company or a broker, and supplying them with the relevant details they require, you will be issued with a quote, often within minutes, allowing you to start immediately to retrieve cashflow tied up in unpaid accounts’ receivable invoices.

To retrieve the most appropriate service and Factoring quote, based on your company’s individual needs and abilities, you will be required to supply all of the outstanding accounts’ receivable invoices which you would like to apply. The Factor will then perform their due diligence, and review your customers’ credit ratings, to ascertain the level of risk involved.

From this, if you accept the Factoring quote, you will be issued with a percentage of the outstanding invoices, usually within a maximum of two working days. You will be able to use these funds immediately after they have arrived in your bank account. The Factor will then send the relevant invoices to each of your customers, instructing them to pay the monies to them directly, once payment has fallen due. Finally, once payment has been received by the customer, you will be sent the remaining amount, minus the Factor’s fees.

Should there be a default on one or several payments by your customers, some Factoring companies may offer to provide chase-up calls or letters, although this should be your decision, as maintaining your relationship with your customers is top priority.

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Factoring as a service

Normally, a Factor’s service offering will include:

  • An agreement to pay you a certain percentage of the outstanding amount on your accounts’ receivable invoices
  • Details of when the advance will be paid
  • An offer to provide a sales ledger and credit management facility – sometimes even a collection service

Payment normally involves both a service fee, often a percentage of your company’s turnover or the value of each individual invoice; and a percentage of the interest rate, based on the amount of advance you require. This percentage will vary, depending on the services offered by the Factor.

Some Factors may also charge for re-Factoring, whereby the customer has not paid their invoice within the credit terms offered, and an underutilisation fee, if you use significantly under the estimated loan value.

Factoring brokers – making life easier

To avoid being inundated with Factoring quotes from providers, many businesses choose instead to use a Factoring broker, who can search the market in minutes to find the best quote, and provide specialist advice on what to look out for and to expect.

However, for those who wish to go it alone, Factoring quote comparisons are usually made on both the service fee and the loan APR. However, be aware that there are many subtle differences in operational issues, which may well result in a not so subtle impact on your balance sheet. It is vital that you compare quotes intelligently and with some background knowledge, rather than just accepting the first one.

Touch Financial – choosing the best Factoring quote

Touch Financial, one of the UK’s leading Factoring broker, has over 60 years combined experience. Our experts know the questions to ask, the information to provide and the pitfalls to avoid, as well as being equipped with the best bargaining tools, to secure the best service package for your business.

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