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A strained cash flow and late payments from your clients are a major problem for many B2B businesses. However, factoring your invoices can prove to be the solution to help your business grow and succeed.
What is invoice factoring?
Invoice 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 invoice 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 – You can 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 be continually renegotiating.
- 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 burden of chasing customer payments so you can focus on your business. This can save you 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, creditworthiness 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 invoice 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 the money which has already advanced. However, if you opt for ‘non-recourse’ factoring, you are effectively ensuring 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, but factoring rates will vary on a case-by-case basis. Additionally, there is usually a fee to set-up the facility and an exit fee.
Invoice factoring costs can be 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.
What can we do for you?
If you’re worried about unpaid invoices, or constant late-paying clients, invoice factoring could provide you with the perfect facility to help move your business forward. It can give your business that injection of cash, as well as taking the responsibility of collecting late invoices, off your hands.
With our experience and expertise in the industry, we are brilliantly placed to help secure an excellent factoring facility for you. We work closely with 50 of the top blue-chip funders, gaining access to exclusive rates and deals. If you’re curious about what we can offer you, we work nationwide and provide a free consultation, with a no-obligation quote.
Some of the partners we work with...
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 the range of lenders and their varying services and are proud to offer advisory and introductory services to finance providers that suit your needs.