Advantages of factoring

The main advantage of factoring and invoice discounting is that it allows companies to turn their debtors into cash with the minimum of delay.

Rather than waiting 30, 60 or even 90 days to be paid, a factoring company will advance up to 85% of the invoice value (including Vat) by return with the balance being paid over once the customer has paid his account.

Unlike other methods of finance the availability of factoring finance should normally increase in line with sales which means that a company is able to increase turnover without worrying about where the cash to fund the increase in sales will come from unlike more traditional bank overdrafts and loans which tend to have fixed facility limits geared to available security.

Other advantages of invoice factoring include costs savings on sales ledger maintenance as the factoring company will run the sales ledger including credit control which should free up the company’s management’s time to spend on more profitable things that should benefit the company elsewhere.

Factoring Solutions

5 Torridge, Hockley, Tamworth, Staffordshire B77 5QL

Tel: 01827 707680