Want to Factor your invoices? Free Advice here

In our experience, it’s particularly difficult for a company that is looking to factor its invoices for the first time to get a good deal. Typically you will have spoken to a few funders direct (or filled in their online forms!) and you will have been offered lots of different products. It can be a bit of a minefield. How do you know whether the deal you are being offered is competitive or not?

Before you sign anything, give us a call and we can help you compare quotes or find you the right funder first time!

Give us a call and have a chat. Tell us about your business and what you are trying to achieve. Based on what you tell us and our knowledge of the current market, we’ll put you in direct touch with relevant funders that we know will be the best fit for you.

If you are new to factoring, you want to ensure that you get a flexible funding package that won’t tie you up for a long time and that has a flexible pricing structure (so as your business grows and you get a track record, the price you pay is reduced because you become less of a risk to the funder).

Many funding companies tend to perceive all businesses that are new to any form of invoice finance as high risk and they charge a premium. This “one suit fits all” approach is unfair and if you already have some good robust internal credit controls in place, we can often negotiate on your behalf and reduce the costs you may be asked to pay.

In such cases, it may be that factoring may not be the best route and you could consider invoice discounting instead (this is a cheaper form of finance as you are responsible for chasing your debts – so less work for the funder to do).

Example costs for a small company that is new to Factoring.

Lets assume that you are a smallish company with a turnover of about £500K. You are a manufacturer and you generally have good quality customers (they pay their bills – and mostly on time!)

You would typically expect to get an 80% advance on the gross (inclusive of vat) value of your invoices and a funding limit of £75K. The funder would probably charge you a service charge of 1-1.25% of the value of the invoice and you would also be charged 3% over bank base rate of any funds in use (the money you draw down against your invoices.

This would cost your company around £5-6,000 in the first year. Many agreements run for 12 months with 6 months notice, so be sure to call us before you sign up for a deal which may not be suitable for you.