In a similar way to invoice discounting, factoring can benefit companies which trade on credit terms by quickly releasing up to 90% of their sales ledger value, shortly after the invoice has been issued, to improve cash flow and aid growth.
The main difference with factoring is that the financier also provides a dedicated sales ledger management service. This has the advantage of removing the time and costs associated with chasing debtors, so that resources can be concentrated on what matters most – your business.
Factoring is highly flexible and can be tailored to the individual needs of a business. The most basic factoring facility is recourse factoring, which releases working capital against the value of the sales ledger for a recourse period of up to 150 days.
More specialist factoring solutions are also available, and include non-recourse factoring, (which safeguards against non-payment or protracted default) Confidential Factoring, (which works on a non-disclosed basis) and Export Factoring, (which facilitates overseas trade).
To find out more, please contact our Account Management team.