The Best Factoring Company


We often get asked by business owners, “Which is the best factoring company for my business?” The answer is not always immediately obvious as relies heavily on the type of business that we are talking to and the unique requirements of that business.

The best factoring company for a multi-million pound turnover exporter will probably differ from the best factoring company for a small, new start recruitment company. It is equally important for both businesses to approach the right factoring company but the answer to which one will be the best will be different for both.

At Funding Solutions we focus on your business and your requirements before we make a recommendation. We take into account the following:

The Size of your Business and its Funding Requirement:

Some invoice factoring companies can only lend up to a certain amount with some of the smaller lenders not willing to lend more than £50,000 while at the under end of the spectrum are lenders that will only look at facilities in excess of £1m. On that basis it is important to find a lender that actively targets businesses of your size.

Your Growth Plans:

Some lenders are restricted in terms the size of facilities they can offer so if you are anticipating rapid growth it is important to consider whether the lender you are approaching can accommodate and support those growth plans.

The sector your business operate in:

Different lenders target different sectors and some lenders are better placed at dealing with certain sectors than others. Some invoice factoring providers avoid certain sectors or are cautious about them and as such restrict facilities to mitigate those perceived risks. If you operate in temporary recruitment there are numerous options depending on what you actually want to achieve while if you operate in the construction sector your options are much more limited.

Your Customer Base:

Factoring relies heavily on your customer base. Lenders will look at what sector they are in, how well rated they are and where they are based. If you are exporting some lenders will not be able to assist while others actively target exporters.

Geographic Location:

Some invoice finance companies cover all geographic areas while others are far more regional. If you are based in Scotland or Northern Ireland for example it is important to understand which lenders can actually assist. A small regional firm may be better placed to meet your needs rather than a large corporate invoice factoring company but we need to understand the available market of lenders to make that decision.

Service Requirement:

We need to understand what you expect from a service before any recommendation is made about the best factoring company for your business. For example a lot of the larger lenders that offer factoring help collect the outstanding invoices by automated overdue letters and month end statements. This may be all you are looking for and cost may be your sole focus. However, other factoring companies offer a proactive credit control service where every customer is chased by telephone to ensure invoices are settled in a timely manner.

The best factoring company for your business is out there but it is imperative that you understand what your requirement is and which factoring company can meet those requirements. The difference between the best factoring company and the worst factoring company for your business will truly be like chalk and cheese.