If you run a business which involves many large invoices then the difference between invoicing and receiving the money can get a little close to the knuckle sometimes. After paying staff costs and any additional costs you may find yourself digging into reserve funds to keep afloat, a stressful situation. Selective Factoring services aim to remove this risk as they pay 90% of the invoice up front and chase the invoice for you. Factoring is selling your debts to a factor, this usually costs a percentage of the total invoice but can save a company from going bust.
Transforming Your Cash Flow Using Factoring Service
As a business, maintaining proper cash flow is a top priority. In an age where lending is becoming increasingly difficult you need to get access to necessary funds as quickly as possible, but sometimes customers don’t always play ball. You send out an invoice then have to wait a month, if not longer, for it to be paid—in a tough economic climate that can be disastrous to a business, so wouldn’t it be nice if there was an alternative? Well, with Factoring, there is. All you have to do is give the Factoring Lender your invoice details and they could release up to 90% of the funds within 24 hours, giving you instant cash flow and ensuring your finances aren’t tied up elsewhere. The Lender will even chase customers for you so there’s zero hassle, so if you want to see how Factoring could help transform your cash flow make sure to get in touch and see what we can do.
Factoring ensures you a great success for your business
Owners of small businesses will know just how frustrating it is when clients take an unreasonable amount of time to pay their invoices. Whereas larger businesses can often manage for longer periods of time without their payments, it can be dangerous for small businesses, who can easily run into cash flow problems. It is out of the question for small businesses to even think about growing when they are struggling to meet every day running costs, due to late payments from their clients. At the beginning of a contract you should set out strict payment guidelines with your customers, however if you are still running into problems, why not sell your invoices to a third party finance company offering factoring services? Factoring ensures that you receive a large proportion of your funds immediately. They will chase up the payments on your behalf and once the invoice has been paid, the rest of the money will be released, minus a small fee.
In the current economic climate many small to medium enterprises are struggling to grow as they are unable to secure the funding they require. During the recession banks tightened their lending criteria and are still unwilling to take any big risks. What does not help is when businesses have most of their assets tied up in unpaid invoices. Factoring is an alternative financial solution that many small businesses are turning to. Companies simply hand their outstanding invoices to finance companies who will release a large percentage of their funds whilst they chase up the full payment from the customer. Once the customer has paid their invoice the finance company will then release the rest of the funds minus a small fee for the service. Factoring services ensure that businesses always have the funds to pay their everyday running costs, staff wages and taxes. It prevents small businesses running into cash flow problems and helps them achieve growth over time.