Factoring is where a business sells its debtor book (i.e. invoices) to a third party (factor) at a discount in order to fund its continuing business and is a useful alternative to using a bank overdraft to cover money owed. This is becoming an increasingly common method of raising finance and can be beneficial to a growing business because it uses the creditworthiness of your clients, rather than your own assets, to support your cashflow.
There are some real benefits to be had from using a factor. You will be able to check the creditworthiness of your clients, you will be insured against bad debt and debts will be collected on your behalf. This last benefit is particularly appealing to most business owners who wish to invest their time and effort in running their business rather than in chasing outstanding invoices. Another considerable advantage of this system is that you have access to an agreed percentage of your invoices as soon as they are raised.This is only one of the many ways in which we can assist with your finances.