Invoice Factoring
Invoice factoring could supply your business with a cash improvement or can smooth your capital. It gives around 90 % of your gross outstanding invoices.
At Funding Solutions we recognise that money is the lifeline of any type of business. Our expertise and experience in cash flow solutions enables us to establish inexpensive centres that are structured in a manner that will certainly meet your company needs.
Our purpose is to guarantee that your company has an factoring facility that is fully enhanced. That means your prices are reduced and the money produced is maximised. We do this by taking into consideration the complete costs rather than just the headline prices of invoice factoring and by taking into consideration any restrictions that could lessen the funding generated. Our years of experience of helping companies like yours enable us to do this successfully to make sure that you the customer save both time and money.
The benefits of invoice factoring
Factoring offers your company a number of benefits that include:
~ Smoothing your capital by releasing up to 90 % of the money bound in overdue invoices.
~ Supplying an optional outsourced credit control service to gather in overdue invoices with letters, month end statements and telephone calls.
~ Confidentiality if needed. If you feel that you would like to keep the facility confidential there are confidential factoring facilities available.
~ Invoice factoring expands in line with your sales offering the functioning resources to assist your business expand and thrive.
~ Facilities are offered for companies of all sizes from new beginning companies through to significant corporate businesses.
To gain the benefits of an invoice factoring facility it is crucial that the facility is structured effectively from the beginning to meet the unique needs of your company. It is important that you understand the fees entailed and also ways to manage those costs. This is where the expertise of Funding Solutions could add value to your business.
The criteria of invoice factoring
As mentioned in the benefits invoice factoring is readily available to petit new start businesses right through to large well acknowledged businesses. Exactly what are the basic criteria for obtaining a factoring facility?
~ You need to be a company selling to various other companies,
~ on credit terms or planning to sell on credit terms,
~ Invoices should be raised in arrears of delivery of the goods or service you deliver.
~ Your customers need to be creditworthy.
If you fulfil the above requirements there is an excellent opportunity that we could source a suitable facility for your company.
We wish to establish a facility, what do we need to do next?
The group at Funding Solutions would welcome the opportunity to work with you. Whatever your motivations or obstacles are we have the knowledge and expertise to assist. Please contact us on 0845 251 4040 to review your requirements or e-mail us at finance@fundingsolutionsuk.co.uk
We are invoice factoring professionals.
Factoring Fees: How much Does it Cost?
Invoice factoring is an affordable alternative to traditional lending. As with any type of funding, it is important that business owners fully understand the total cost of factoring. That means looking beyond the headline rates.
How Much Does Invoice Factoring Cost
The fees charged depend on a few variables that will be unique to your business:
- Your turnover
- The number of invoices that you issue
- Your industry
- The creditworthiness of your customers
- The credit terms you offer
Average factoring costs fall between 0.2% and 5% depending on the factors above. Turnover is the major variable in calculating factoring rates. Larger monthly amounts factored equal lower fees.
Typical Invoice Factoring Rates
Flat Rates vs. Variable Fees
Traditionally lenders have charged a service fee as a percentage of each notified invoice. Then you pay a discounting fee (like an interest charge) on the amount you actually borrow.
Some lenders now offer a flat monthly fee for providing the invoice factoring service.
Advance Rates
When your company factors invoices, you’ll typically receive a large percentage of the invoice up front and the remainder is held in a reserve until your customers pay the invoice.
Factoring advance rates vary by industry. Industries that are riskier and harder to fund such as medical and construction can expect advance rates between 60% and 80%. Advances for general businesses and staffing companies can be anywhere from 80% to over 90%. Those in the transportation industry typically see the highest advance rates, ranging from 92% to 97%.
We recommend getting quotes from multiple factoring companies to get a good feel of what you should expect to pay for factoring services and to get the lowest invoice factoring fees for your business.
What Does the Cost of Factoring Offer My Company?
Invoice factoring costs include immediate access to working capital. However, when you start factoring invoices, you’ll see that factoring companies offer more than just immediate funding.
Administrative Support
Lenders will offer credit control and credit checking services alongside your funding.
A Path to Better Credit
With improved cash flow you can pay suppliers quicker and build up valuable trade credit.
Flexibility
Instead of a strict credit line, invoice factoring gives you access to the cash you need whenever you need it! Importantly it grows in line with your sales so it offers a flexible working capital solution.
