Factoring & Discounting

What is Factoring?

For suppliers, ‘Factoring’ is a unique and flexible form of finance that applies to the whole sales ledger. When an invoice is raised by the supplier, a percentage (85-90%) is generally paid to the supplier by the Factor in lieu of final payment from the buyer. When the buyer settles the invoice in full the Factor pays the supplier the remaining percentage of the issued invoice, minus the Factor’s service fee.

What is Discounting?

When only a selected part of the sales ledger, or a particular customer/ invoice value, etc., are factored.

In both cases a negotiated rate of interest is charged by the Factor (on a monthly basis) on the outstanding balance.

Image shows the benefits of factoring and discounting.

As we work with a number of finance providers, the additional extras available will differ depending on the package that suits you best. For example, one provider can manage your sales ledger and chase/collect all outstanding invoice payments on your behalf, saving you time and money.

Another provider can organise statements to be prepared and sent out, telephone all of your customers, collect payments and maintain professional and detailed accounts of your transactions, so you have the time to concentrate on generating more business.

When you have your initial assessment with us, we can talk in more detail about the other options available to you.

 

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