Fincred CF is an invoice factoring broker that will help you find funding against your outstanding invoices. Our factoring solutions can improve your cash flow and help your business grow.
Our sister company, FinCred IS can help protect your business against bad debts arising from customer insolvency.
What is Invoice Factoring?
Invoice factoring is a form of invoice finance where an invoice funder provides funding against the invoices your company raises to its customers. Instead of waiting up to 90, or more, days for your customer to pay the outstanding invoice on the agreed credit terms, the funding provider will forward a percentage of the invoice value.
This gives you immediate access to cash tied up in outstanding invoices. The amount of cash you receive is based on an agreed percentage, usually up to 90% of the invoice value but this can be higher.
Some of the credit-control procedure is managed by the bank or funding provider, including chasing debts. When the outstanding invoice is due for payment, your customer pays the balance directly to your funding provider. The burden of credit control, including chasing customers’ debts, is outsourced, leaving you free to focus on other aspects of your company.
Invoice factoring is also known as business factoring, debt factoring and export factoring.
Is Invoice Factoring the Same as Financing or Discounting?
Invoice factoring, or simply factoring, is a type of invoice finance. The finance provider will usually purchase your invoices at and pay an agreed percentage of the invoice value upfront, drastically improving your cash flow.
The main difference with invoice factoring is that your customers will be aware of the funder’s involvement and your finance provider will be responsible for certain aspects of your credit control, such as issuing invoices and chasing debts.
This difference is described in more detail on our receivables finance page.
Is Factoring Suitable for my Business?
Invoice factoring can provide an array of benefits to your business, but at the same time it needs to work with your business..
Invoice factoring is often favoured over invoice discounting by newly established companies or companies that have a less established credit control department. The responsibilities of issuing invoices, chasing debts and ledger management are passed on to the bank or financier as part of the factoring agreement.
Under a factoring agreement, your customers will be made aware of the invoice finance provider’s involvement in your business. This can provide welcomed assistance with managing cash flow, as you will employ the expertise of a highly experienced team to assist in collecting money owed to your business. Businesses often feel more comfortable outsourcing such an integral part of their business cycle to a highly qualified team of professionals.
Am I Eligible for Factoring?
We can provide business factoring quotes for almost any situation. However some eligibility criteria must be met. For example, your business must be a UK limited or public limited company.
If your company has adverse information affecting your credit score, you may still be eligible for debt factoring. We can help you find a solution for businesses with a clean credit score or businesses that have struggled to find finance due to a negatively impacted credit score. If you have been declined any form of invoice finance, even on multiple occasions, we may still be able to help.
What are the Costs Involved in Invoice Factoring?
There are two main types of charges involved in an invoice factoring or business factoring facility, the discount fee and the management fee.
The discount fee is the charge levied on funds used under the factoring agreement. The discount fee can start as low as 1.5% and is only charged on funds that you draw down from the available amount.
The management fee is charged for the administration aspect of the facility. It is often charged as a percentage of your total turnover, and this fee can start from 0.2%. In some situations it is possible to negotiate a fixed management fee so you don’t have to worry about rising costs if your turnover increases and your company grows throughout the year.
Work with FinCred CF, an Invoice Factoring Broker
Fincred CF is an independent broker. Finding the best deals for our customers is at the heart of our mission. That makes us the best choice for finding invoice factoring that is right for your business.
Though commercial finance can be complex, you don’t have to go it alone. We are financial experts ready to help you. We will become your partner in finance that your business can rely on.
Ready to release capital trapped in your invoices? Contact Fincred CF today for a free invoice factoring quote.
UK Wide Industry Statistics
Total value off all sales financed in the UK - £bn
Domestic invoice discounting - £bn
Total number of asset based lending clients
Domestic invoice discounting clients
Please Get In Touch
If you wish to speak to a receivables finance broker please fill out the form on the ‘Contact Us’ page by clicking the button below.