about factoring

Bringing help to businesses in the UK since the early 1960's, nearly 50,000 companies in the UK use a Factor.

The essence of Factoring is cashflow, with professional sales ledger management included. If you use a Factor you can access up to 95% of the value of your eligible sales invoices. In many cases this will bring a business significantly greater working capital than they may be receiving from a conventional source like a bank overdraft. So your business has extra working capital - the Factoring company will also run the sales ledger, send statements, reminder letters, reconcile payments and so on and they will collect payments from your customer. If needed you can insure yourself against the risk of your customer becoming insolvent. You can access all information relevant to your sales ledger from the Factor's system and they can produce a variety of different reports, not only helping with administration but marketing as well. Factors pride themselves (and measure themselves) on their collection skills so it's always worth asking how quickly the Factor you are planning to use collect. When payment is received, you receive the balance, i.e 5% assuming the Factor advanced 95% on Day 1, less the Factors charges. By way of an example a business with annual sales of around £1m may be owed £190,000 by its customers.(This equates to around 70 days worth of sales so would not be untypical of a UK business selling on 30 day terms).Until a Factoring facility was implemented the company may operate on a bank overdraft of £100,000. A Factor may offer a 90% facility bringing £170,000 into the business. The bank would reduce its facility (it's just lost some of its security) to around £20,000 after Factoring, so the company would have increased working capital of £90,000. The extra money could be used in many ways, from deposits for new plant & machinery to additional raw material purchases, obtaining favourable discounts on the way; purchasing other assets, employee benefits; pension contributions etc. Not least the simple fact that working capital is increased means accelerated growth. Critically, the facility grows with the business, and is always expressed as a percentage. No need to go cap in hand to a bank, whose first reaction to increased sales is often the use of the word overtrading! Factoring Partners has been helping businesses for 10 years now with hundreds of companies now enjoying greater funding levels. Factoring Partners can offer impartial opinions on the merits and suitability of services offered, and cut through the jargon, explaining clearly how the facility will work Factoring solves real business problems, so if your business suffers from a lack of cash, is worried about possible bad debts, has concerns about administration issues then take a look at the factoring solutions page to see how Factoring may help a particular problem. If you are a recruitment/employment agency there are Factoring products aimed directly at you and you'll find some more information here. Likewise if you are a haulage business there's more information here. Whatever your business please take a look to see what some actual clients have to say.