Factoring is a simple process of borrowing money against your business’s outstanding debtors, with an additional credit control function provided by the lender.
It works well for businesses whose customers pay beyond agreed payment terms, providing month-to-month working capital funding.
A typical factoring facility would be disclosed to your clients by way of an assignment notice, usually written on your company invoices.
Factoring is generally suitable for all business types but as with invoice finance, you can only borrow against business-to-business sales transactions.
The cost varies, normally ranging from 2.5 to 4% over base rate for the money borrowed, together with a service charge linked to gross turnover.
Subject to your business type and the risk associated to the sector you operate within, the lender will advance up to a maximum of 90% of your eligible debtors.
You can fund both domestic and exported sales, alongside protecting the ledger and debtors against bad debts.
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You can download our proposal from below which will provide us with sufficient information to take your proposal to the market, however this is not an application for finance and nor will finance be secured or agreed without direct contact with the lender.