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What is factoring?
Factoring is a financing service designed to boost your cash flow and remove the hassle of credit control from your business. As finance brokers, we work with you to secure the best factoring facility for your business’ needs.
The factoring companies we work with will extend credit to you based on your business’ needs and they will secure their funding against the book debts of your company so in most cases your home will not be needed to secure the company’s borrowing.
Factoring offers a quick and easy solution to deal with slow-paying customers, provide working capital usually within 24 hours and the option to protect your business against bad debt losses. Why not get in touch with us and we will compare the finance market for you to find the deal to secure your cash flow and save you money?
What will the factoring company do?
When you raise an invoice to your customer, you will also need to send a copy to your factoring company. They will then transfer up to 90% of the invoice value to you within 24 hours, providing you with an instant cash injection.
Your factoring company will take charge of collecting the debt from your customer and once the remaining balance has been paid it will be provided to you, minus their fees.
Why should my business factor its invoices?
We work hard to find the factoring company which will be able to offer you many benefits including:
- Working capital – To plug any financial gaps allowing you to fulfil your expansion goals, meet your liabilities and capitalise on lucrative business deals. As your business expands so will your factoring facility so there is no need to constantly renegotiate.
- Dealing with your customers – Cash within 24 hours limits the effects of slow-paying customers whilst also improving customer relations. You may even find yourself in a position where you can offer extended credit terms to your customers which could give you a sales advantage.
- Protection against bad debt – You can add insurance cover to your factoring facility so a default by a customer is unlikely to threaten your business or significantly affect your credit rating.
- Removes credit control responsibility from your business – Unable to manage your credit effectively in-house? Your factoring company can pick up the responsibility of chasing customer payments so you can focus on your business. This leaves you free to concentrate on your business and you save on the cost of employing a credit controller.
- There is less focus on the financial strength of your balance sheet – Factoring companies rely on the strength, credit worthiness and spread of your customers whereas banks focus more on your financial information. This makes factoring ideal for many start-up businesses.
Are there any risks associated with factoring?
- Factoring companies like to spread their risk – They prefer not to see an over-reliance on one or a few large invoices. This could result in the factor advancing a smaller percentage of your ledger.
- Customers that don’t pay – Factoring companies will claw back money already advanced however if you opt for ‘non-recourse’ factoring you are effectively insuring the payment.
How much will factoring cost my business?
Each company is unique so once we have more information we can give you an accurate quote. Costs include an interest charge for the period your company is borrowing and a service charge for the work involved. Additionally there is usually a fee to set-up the facility and an exit fee.
Factoring is usually more expensive than bank borrowing but a factoring company will often lend when a bank will not. Factoring companies generally rely on your debtor ledger and they determine your interest rate based on your business’ stability and spread and quality of your customers.
As a broker looking to find you the best deal, we do not charge an introducer fee. Any additional charges, such as for bad debt protection, will be part of the factoring company’s overall fees.
So if you are fed up of waiting for invoices to be paid or you want to get your cash flow back on track, call us now. We will discuss your needs confidentially with our panel of lenders to obtain your free, no obligation quote.
Some of the partners we work with...
From a funders perspective, I find that the team at WF Financial Solutions, really take the time to understand the customers’ needs and wants and with their vast experience are able to match them with the correct funders. This really helps the funders to build a fast and trustworthy relationship to ensure any facilities are provided in a timely manner.
- Wayne Spratt, Business Development Manager, Bibby Factors Yorkshire
Why choose us?
WF Financial Solutions is an independent broker of invoice, asset and trade financing solutions with links to lenders of all sizes and specialties. WF Financial Solutions has helped many clients through a range of lenders and their varying services and we are proud to offer advisory and introductory services to finance providers that suit your needs.
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We specialise in sourcing the best factoring facilities for start-up’s, SME’s and big businesses.
One man band to large corporation, we work hard to ensure you get the deal that works for you.
Trading internationally, buying an asset or looking to refinance, we’ll help you get the best deal.
Sector Specific Funding
Different sectors have different needs and we pride ourselves on working hard to understand your situation.
We work closely with banks to secure the right banking facility or commercial mortgage for your business.