Invoice Factoring UK Explained

Invoice Factoring UK, which unlocks the cash tied up in debtors, is becoming an increasingly popular solution for UK businesses of all sizes. At a time when credit is in short supply and customers are stretching their payment terms, it provides a highly effective way to improve cash flow.

Invoice Factoring UK explained

The process of Invoice Factoring is very straightforward. A business enters into Factoring arrangement with a bank or other financial organisation. This agreement means that as soon as the business invoices one of its customers, it passes the invoice to the Factoring supplier.

The majority of the invoice value, sometimes up to 90%, is paid immediately by the Factoring supplier. They then take responsibility for ensuring the customer pays the full invoice. When the invoice is settled the outstanding balance is paid to the business, less a small service fee.

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Invoice Factoring UK benefits

Invoice Factoring offers a range of benefits to the businesses that use the service. These include:

  • Improved cash flow, allowing creditors to be paid on time
  • Reduced administrative overheads as credit control is outsourced
  • More time to focus on business development rather than cash issues
  • Flexibility about how much you choose to borrow
  • No assets are used as security for credit
  • Confidentiality can be maintained, if it’s important that customers don’t know

If your business is struggling with cash flow and can take advantage of some or all of the benefits listed above, perhaps you should consider Invoice Factoring.

Taking good advice

As Factoring becomes more popular as a solution for UK businesses, so the number of potential suppliers increases. High street banks compete with a broad range of other suppliers, all offering similar but slightly different Factoring packages.

The choice can appear daunting to a business that’s not used Factoring before. So it’s important that you get good advice, ideally from an independent broker who understands the Factoring market. You want to speak with someone who has the experience and knowledge that can help to identify the product which is right for your needs.

Touch Financial is an entirely impartial advisor on Invoice Factoring and related solutions. We have years of experience helping many organisations overcome financial challenges and achieve stability.

Our experts are all based in the UK and have worked with many different types of business. We understand the issues you face because we’ve been there with other people, and we’ve helped them through to success.

We offer a no-obligation consultation to organisations who want to know more about how we can help them. Alternatively, for an instant Factoring quote complete our simple online form. Within minutes you can find out how much additional finance Touch Financial can generate for your business, along with an indication of the costs.

If filling in forms isn’t your thing you can call us now on 0845 388 9725.

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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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