Factoring
Factoring
This facility is ideal for businesses that wish to concentrate on growing their sales without having to worry about the day to day management of the sales ledger or finding the overdraft is not sufficient to keep up with the order book.
Factoring is the name given to a full service facility that enables your company to finance your sales invoices as they are raised. Instead of having to wait up to 90 days for your clients to pay outstanding invoices you will have the ability to raise funds against all or some of the outstanding invoices to fund the business.
Simple Commercial Finance can arrange advances up to 90% of the value of each sales invoice often within 24 hours (of the invoice being raised) with the balance less charges becoming available when your customers payment is received.
The factoring company will also assist with the collection of the individual debts to help reduce the amount of aged debts.
Factoring Companies will send your customers a monthly statement and remittance advice detailing the amounts outstanding, chasing letters on a regular basis, as well as collecting the monies by cheque or BACS from your customers direct.
The Factoring Company also understand that they are acting on behalf of their clients in collecting monies and actively look to build a relationship and rapport with your customers. Dedicated Credit Controller's are often a feature and they are keen to avoid a 'chasing script' thus protecting the trading relationships built up by your business.
A majority of lenders now provide confidential facilities which mean your clients will never know how you are funding your business cashflow
As the business sales grow, so does the availability of funds, without the need to apply for an increase in the limit as with a normal overdraft facility. Unlike conventional overdraft finance an increase in the funds released will not need the company or the Directors to provide additional security.
Simple Commercial Finance can also provide a comprehensive credit insurance policy to cover your sales invoices against bad debt situations.
This service is particularly suited to small companies who do not have their own credit controller or who are short of time on a day to day basis to keep control of the sales ledger payments. With many of Factoring companies offering online services it represents an effective and flexble method of funding your working capital requirements. A good funding partner will allow the Business owner/manager to concentrate on increasing sales whilst the back office sales ledger management is taken care of professionally and effectively.
The facility can be put in place very quickly often inside 5 working days and there is no need to change your existing banking arrangements.
(NB - Personal Guarantees from the Directors together with a Debenture of the Company are likely to be a feature of any offer made by a Factoring Company)