Factoring
- Business Finance
About
Factoring
Traditional
funding like bank overdrafts and loans, are usually too inflexible
to cope with the cash flow demands of a growing business. As a new
venture you are likely to experience your steepest growth curve
at the beginning. The need to renegotiate as limits are quickly
exceeded can tie up time, and often attract unwanted fees. This
can be avoided by using factoring. Available funds grow in line
with your sales, and you don’t usually need to use personal
assets as a security.
Business
management can be very difficult, managing staff, deliveries, negotiating
with new and existing customers and all of this takes up management
time. This precious time can be increased through the provision
of professional credit management, also provided as part of a factoring
facility.
How
Does Factoring Work?
A factoring company will release as much as 90% of the value of
your unpaid sales invoices (usually less a small service fee) within
24 hours or so of your raising them. They pay you the remainder
once they receive payment from your customer. All you have to do
is issue your invoice and send a copy to them. Having agreed a collection
procedure with you in advance, they then send statements and reminder
notices.
The
factoring company normally work closely with you to balance your
need for prompt payment with good and lasting relationships with
your customers. You normally remain in control of your customer
relationships.
List
of Business Banking and Factoring Providers
OCIS
provide general financial information, we urge you to consult an
Independent
Financial Adviser ( IFA )
before making any important decisions about your finances. |
