Factoring
your invoice value within 24 hours?
What is factoring?
If you own a small to medium business and you rely on customers paying invoices within a 30 day period for your working capital, your cash flow is effectively tied up in those invoices. This limits growth and can cause problems when paying staff and suppliers.
Factoring is the process of releasing cash from invoices as soon as they are issued, allowing you to put the money to work where it is needed most.
Compare costs from leading factoring companies
Within the United Kingdom there are hundreds of invoice finance brokers and providers which offer factoring and invoice discounting services. At Decision Finance we have established strong partnerships with over 20 of the UK's leading providers of invoice finance. Some of our partners include Lloyds TSB Commercial Finance, SME Invoice Finance, Barclays Sales Finance and Royal Bank of Scotland.
Decision Finance gives you comparative quotes which show you how much factoring will cost your business.
How much cash can factoring release?
Factoring services can release up to 85% of the value of an invoice within a couple of days of the invoice being issued, typically you could receive cash advances within 24 hours. We can supply instant online quotes from the top factoring companies that will best meet your business needs.
How much does factoring cost?
The first step is to request quotes for factoring services. Costs and services can vary considerably, so we supply an impartial quotation and brokering service free of charge and our expert advisor will talk you through the process and answer any queries relating to the breakdown of factoring costs.
Factoring is very competitively priced compared with other types of business finance. The fee is in two parts. A service fee, covering the day to day servicing of your purchase ledger, usually between 0.5% and 3.0% of your turnover. An interest charge, charged against the amount of each invoice. This will usually be a fixed percent above the factor's base rate.
Outsourcing the management of your sales ledger
In addition to releasing cash from qualifying invoices as soon as they are issued, factoring companies can also handle the management of your sales ledger.
The running of your sales ledger and payment control service involves management of invoices and the collection of unpaid invoices. Handling this in house requires sufficient information systems and experienced staff to cover all the administration work involved.
Relieving the burden of your sales ledger can be a more cost efficient and an effective way to manage invoices. It leaves you with more time to develop your business, using the working capital from your outstanding invoices!
The difference between Invoice Discounting and Factoring
Although outsourcing your sales ledger is an integral part of factoring, you do not have to do so in order to release cash in your invoices. The factoring service falls under a broader umbrella called invoice finance. Invoice finance also includes Invoice Discounting.
With invoice discounting you get to enjoy the liberation of having cash released immediately from qualifying invoices. As with factoring you can release up to 85% of the value of invoices and have the cash typically within 24 hours of the invoice being issued.
However invoice discounting, unlike factoring, allows you to retain control of your sales ledger. Because of this, invoice discounting is typically aimed at large organisations that have adequate processes and staff in place. Learn more about invoice discounting.
Factoring Companies in the UK Within the United Kingdom there are hundreds of invoice finance brokers and providers which offer factoring and invoice discounting services. At Decision Finance we have established strong partnerships with over 20 of the UK's leading providers of invoice finance. Some of our partners include Lloyds TSB Commercial Finance, SME Invoice Finance, Barclays Sales Finance and Royal Bank of Scotland.External links:
Factors Association
Lloyds TSB Commercial Finance Factoring & Invoice Discounting
Information about factoring at Business Link
