Invoice Discounting/Factoring

Invoice Discounting and Factoring are both flexible methods of improving your cash-flow by releasing monies tied up in your sales ledger.  Up to 90% of the invoiced value of your goods or services provided is available.  Unlike bank overdraft and loan facilities, the finance available to you grows in line with your sales, and is not limited to the fixed asset security you have to offer.

Key Features : Factoring

• Funding up to 90% of outstanding sales invoices
• Disclosed – Your customers know you are factoring. (There used to be a stigma here but this is no longer the case. Factoring has become a dynamic business.)
• Sales ledger administration by lender, issuing statements to your customers and chasing outstanding invoices / monies.
• Service charge (usually between 0.5% and 3%) and discount charge (usually between 2% and 3% above bank base rate.
• Ideally suited to smaller businesses (turnover £75k+) or new start operations (with limited time or resources.
  

Key Features : Invoice Discounting

• Funding up to 90% of outstanding sales invoices.
• Usually confidential – your customers do not know you are discounting.
• You retain control of and responsibility for your sales ledger administration.
• Service charge (depends on the strength of the proposal but usually much cheaper than factoring) and discount charge (from 1.25% to 3% above base rate.
• Suitable for well-established, profitable businesses with good net worth and turnover usually £500k+
• Frequently available as part of an integrated asset finance package, including stock and plant / machinery finance alongside property term loan / mortgage.