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Factoring or Invoice Discounting - Ten reasons why your business would benefit
Whether you are a new business or you're enjoying healthy growth and increasing sales, or you're considering expansion, unpaid invoices can really restrain your business. Improve your cash flow with Factoring and Invoice Discounting.
Here are ten reasons why your business would benefit from utilising factoring or Invoice discounting.
The majority of small business failures are actually a result of cash flow and not profit problems.
If turnover is vanity, profit is sanity and cash is reality. In fact cash is king!
Increase your working capital and improve your cash flow.
Ten reasons why you could use invoice finance or factoring for your business:
1. It’s a swift and simple process
2. It generates immediate working capital
3. You get up to 90% of your invoice values received with in 24 hours
4. Your available funds grow as your sales increase
5. They provide regular cash flow which allows you to develop firm plans
6. You can increase your marketing efforts to facilitate growth
7. They’re an important source of capital that’s not a loan
8. You can reduce your stress levels caused by having insufficient cash to meet your business obligations
9. The funds are based around the financial strength of your customers and not simply your business or personal credit rating
10. You can offer better credit terms to customers allowing you to attract more business
What is factoring?
Factoring is where a business sells its sales invoices to a third party or factor. The invoices are sold at a discount (i.e. not the full invoice value) in exchange for immediate funds, usually within 24 hours. The factor then collects the invoices on your behalf. Not only will factoring to improve your business cash flow but it will ease the administrative burden of collecting the monies yourself and the nightmare of larger companies not paying on time.
What is invoice discounting or invoice finance?
Invoice discounting allows a business to get an advance against invoices raised before the customer has actually paid. In order to this the business borrows a percentage of the value of their sales invoices from a finance company, effectively using the unpaid sales invoices as security for the borrowing. Similar to factoring except that with invoice discounting your business does the credit collection and keeps the relationship with the customer.
For more information read our buyers guide click link below.
Or get quotes and put the cash back into your business now!
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