Factoring deals for larger companies
If you are a larger established company and have a good in-house credit control, you’ll probably find that funders will offer you an invoice discounting arrangement rather than a factoring deal.
Just to remind you - invoice discounting is a cheaper solution than factoring because your in-house credit control takes on the responsibility of chasing your invoices.
You’ll probably be offered a deal based on a service charge of around 0.45% of invoice value plus an 80% advance on the gross invoice value and a charge for funds in use of 2.5% over base. You could expect a funding limit of about £250K.
Just as with factoring deals, there are many issues which can affect the final amount you will pay each year as you may need to consider additional charges for credit protection should your customers go out of business. The credit worthiness of your customers is also taken into account. As with any major business decision, taking good advice before you sign a deal is vital.
The devil is in the detail
Please remember that whilst the headline rates that you could be offered may be similar to those in the example above, the devil is really in the detail of the contract that you sign and that’s another reason why it’s best to call us and discuss your offer before you make any final agreement with either a funder direct or a broker. Checking with us takes minutes and it could save you thousands! Just give us a call on 0800 993 0193.
