Invoice Factoring - The Definition
Invoice Factoring (also known simply as Factoring) is a flexible Invoice Finance solution that advances working capital to a business as it issues new invoices. Cashflow is the lifeblood of any business and Invoice Factoring simply allows you access to your cash the moment you raise an invoice.
According to Wikipedia, Invoice Factoring is: a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount.
It is the umbrella term for many forms of Invoice Factoring, such as Disclosed Invoice Factoring, Confidential Invoice Factoring, Recourse Invoice Factoring and CHOCS.
It is the most common form of Invoice Finance in the UK and the number one alternative to bank overdrafts and bank loans.
How does it work?
Instead of waiting for all your customers to pay you, by using Invoice Factoring, you are able to receive funds up to the value of 90% of your unpaid sales invoices.
Our experienced and professional credit control team will then take the responsibility for securing the payments from your valuable customers. The remaining 10% is then advanced to you upon payment from your customer, less a fee.
Don't want your customers to know that you deal with an Invoice Factoring company? Don't worry! With our flagship My White Label solution, our friendly credit control team can do all the collections in your company's name and using your company's logo.
What are the benefits of using an Invoice Factoring solution?
The benefits of using an Invoice Factoring solution with Skipton Business Finance are:
- Increased cashflow and access to working capital which leads to an array of financial benefits for your business
- A more consistent cashflow cycle can help businesses meet their weekly payroll obligations, paying for raw materials, upfront fuel costs, paying creditors, HP commitments etc
- Invoice Factoring can be much more flexible than a bank loan or bank overdraft - the facility limit will generally increase as your sales increase
- Every Invoice Factoring client of our has direct access to a Relationship Manager
- Skipton Business Finance is a Skipton Building Society Group company - it's in our culture to care for our clients
- Our costs are completely transparent
- Free credit reports on your clients
- We promise to look at every single applicant in detail
Caring for our clients
When you become a client of ours you'll be pleased to know that we boast an extremely low client-to-staff ratio meaning that you will have a direct relationship with our experienced Relationship Manager. No automated telephone systems and no annoying voice recognition systems asking you what you want in order to put you through to the right person.
You'll have the landline and mobile number of your dedicated (and may we say, very friendly and super-smart) Relationship Manager as well as direct contact details of an Account Executive and the entire Operation's Support Team.
Imagine phoning up your Invoice Factoring provider and they already know who's calling! When we say that we offer a personal service, we really mean it.
