Factoring is a type of invoice finance which is well suited to the demands of growing businesses seeking a cashflow funding solution. The majority of invoice finance products such as business factoring allows the advance of up to 90% of an unpaid invoice value. Here's how Factoring works:
- The Order: You agree to provide goods or services for a customer and you generate an invoice for that customer, perhaps with payment on completion.
- The Cash Advance: You send a copy of the invoice to your factoring lender and they advance you up to 100% of the value of the invoice, often occurring within 24 hours of generating the invoice. This cash can be used to invest in new machinery and assets, training, staff wages and any other costs or investments.
- The Credit Collection: Once the agreed point between you and your customer has been reached, the lender collects the money from the customer for you. This saves you time as the hassle of chasing the customer is undertaken by the lender.
The Remainder of the Cash Advance: As your lender now has the money from your customer, they will send you the remaining balance of your invoice which was not advanced to you in the initial cash advance, minus charges.
For more information contact:
Touch Financial Support Limited
0800 157 7343
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