Factoring, Invoice Discounting and Invoice Finance Information
Any size of business, established or new, in any location ( in the UK) This service is offered to any business that offers credit terms to their customers (not retail). There is a network of advisers waiting to help you with information, guidance and services to assist you in financing your business. BizHelp24 have recruited the services of a small business specialist factor to provide help, guidance and information to those of you who would like to have factoring explained to you without sales pressure, on a one to one basis: its free, and could make an immediate impact on your business. Poor credit history, or lack of a track record is not a problem. All enquirers are welcome whatever your status or circumstances.
Factoring, Invoice Discounting and Invoice Finance
Factoring, Invoice Discounting and Invoice Finance are funding options available to companies that provide a product or service on credit terms to their customers. The purpose of the Factoring, Invoice Discounting and Invoice Finance is to give you access to immediate funds, without having to wait for the customer to pay the invoice. This is particularly beneficial to those of you who are in a growth period and committing more working capital to customer credit / debtors. The company lending you the money will agree that for all invoices raised you will have available 80-85% of the value of the invoice at you disposal. You do not have to take available amounts. The cost structure is similar to that of an overdraft: you pay a service fee and an agreed percentage above bank base rate, calculated on the amount of funding you require and the length of time your customer takes to pay the invoice. There are two types of lending:
Factoring
The ‘your customers paying the factor direct. The collection \ credit control \ credit management is the responsibility of the factor (you have some control, but not a lot). The factor will collect all amounts due and offset this amount against your account. The balance of the invoice (15 – 20%) will be paid into your account, less the fee and interest. To help your cash flow and get support you could consider Ashley invoice finance to get up to 90% of invoice value immediately
Invoice Discounting
Depending on the amounts involved (see below) the factor (sounds better and shorter than invoice discounter) will not be disclosed to your customers. You collect on your debtors, then pay the factor.
Typical figures:
| Maximum Advance | Your Annual Turnover | Finance Fee % over bank base rate | Service Fee % of your turnover | |
| Factoring | 90% | £50,000 + | 1.3 – 3 | 0.5 – 3 |
| Inv.D. disclosed | 80% | £3-500,000 | 1.3 – 3 | 0.1 – 1 |
| Inv.D. undisclosed | 80% | £500,000 + | 1.3 – 3 | 0.1 – 1 |
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