Businesses simply use an Invoice Factoring facility to allow them access to instant working capital which is advanced against possibly their important asset – their sales ledger.
And the process of an Invoice Factoring facility isn't complicated at all.
You invoice your customers and, instead of waiting several weeks (or even months!) to be paid, you can draw funds of up to 90% against those invoices straight away.
The Invoice Factoring lender will then manage your credit control as normal (unlike Invoice Discounting) but you reap the benefits of increased cashflow. You then get paid the remaining 10% as and when the customer pays less a fee which can be a lot cheaper than you think.
Obtaining a working capital advance against your company’s outstanding invoices can be a highly-effective way to ensure that late payments will never again cause your business cashflow restrictions.
It is available for businesses with a minimum turnover of at least £50,000.
Invoice Factoring - finding the right lender
Many big banks and large independent lenders lead the way in providing Invoice Factoring services to UK businesses so there are many established and reputable lenders out there that can cater for your company’s individual needs.
Each Invoice Factoring lender is different and each Invoice Factoring lender has strengths in different areas.
For example, each Invoice Factoring lender has its own criteria in how much it can advance against a company’s sales ledger and at what rate - some are keen to offer high pre-payment levels depending on which sector you work in.
Some offer far less, or charge a higher premium simply because of they pride themselves in customer service.
There are some Invoice Factoring lenders that specialise in single debtor Invoice Factoring or some that pride themselves in funding businesses with very large turnovers.
Whatever your requirements, by using Jewel Financial's unique Invoice Finance Finder Tool, we can match you with the very best lender.
So what type of businesses are ideal for Invoice Factoring?
Invoice Factoring is perfect for...
Haulage - whether you're an owner-driver or have a fleet of 50 wagons, Invoice Factoring is ideal for you.
Recruitment - Agencies specialising in temporary placements that are time-sheet driven are perfect for Invoice Factoring.
Printing - The sector in the UK industry we believe is most ideal for Invoice Factoring.
Couriers - Like the haulage sector, it doesn't matter if you are a sole-trader or have a fleet of 50 drivers, Invoice Factoring is ideal for your business.
Manufacturing - Manufacturer ball-bearings? Legs for wooden chairs? Kegs for brewers? Whatever you may manufacture, Invoice Factoring is perfect for you.
Wholesalers - Supplying goods first and getting paid last is a recipe for cashflow disaster. Invoice Factoring is the best solution.
Engineers - If you're offering leading edge engineering design and consultancy services in a specific field, getting payment fast can be problematic. Invoice Factoring is ideal for you.
Construction - There are Invoice Factoring lenders who specialise in supplying working capital to the construction industry.
Other B2B Organisations - if you provide goods or services to other UK businesses, then Invoice Factoring can be a perfect solution for your business.
- More consistent cashflow cycle - Invoice Factoring can help businesses meet their weekly payroll obligations, paying for raw materials, up front fuel costs, paying creditors, HP commitments and upkeep of expensive machinery to name but a few
- Working capital is quickly accessible - As working capital is accessible when invoices are raised, there is no need to wait for your customers to pay you!
- Easy to implement – With Invoice Factoring there need not be any major changes to a business' finance system
- Increased cashflow - Can help businesses have the confidence to be able to take on bigger, more lucrative deals without the risk of running out of money
- No assest as collateral - With Invoice Factoring you don’t need any other assets beyond the value of your invoices
- Jewel Financial can match you with the most suitable Invoice Factoring lender based on your company's specific requirements