The Advantages and Disadvantages of Invoice Factoring

25th June 2024 

Why choose Invoice Factoring?

Invoice Factoring.png One of the main advantages of Invoice Factoring is obtaining working capital to invest back into your company sooner rather than later, therefore removing the stress and pressure of paying bills on time and allowing you to plan for sustainable growth. By choosing Factoring with Skipton Business Finance, you gain access to 90% of your unpaid invoices on the day you raise the invoice allowing you to enjoy these benefits to your business.


The Advantages and Disadvantages of Invoice Factoring

Invoice Factoring is a flexible finance solution for businesses across industries that include Manufacturing & Engineering, Wholesaling, Printing, Haulage & Logistics, Recruitment and others that grows in-line with your turnover, and the capacity to accommodate evolving business needs.


The advantages of Invoice Factoring: 

- Cashflow boost: The most important benefit of Invoice Factoring is that it provides your company with immediate working capital. Some other advantages also include helping you to restore your cashflow and give you funds to pay your employees, settling monthly bills, help manage overdrafts, and take on new clients.

- More flexibility for you: Our finance solution is tailored for each and every single business that we fund and, more importantly, as your business scales your Invoice Factoring facility could potentially scale up with it. 

- Free credit reports on your customers: One of the main challenges of offering payment terms is trying to determine the creditworthiness of your clients. We will help you make informed decisions and to help you negotiate better terms with your suppliers.

- We will chase your customers for payments: One of the benefits of Invoice Factoring is that our highly experienced credit control team will collect payments on your behalf. This allows you to focus on more important aspects of your business, such as expanding.


Factors to consider when deciding whether Invoice Factoring is right for you: 

- No confidentiality: Whilst Skipton Business Finance can offer confidential Invoice Factoring, most Invoice Factoring solutions are disclosed therefore, your clients will know of our involvement. 

- Invoice Factoring lender will chase your customers for payments: Whilst relinquishing your credit control to an Invoice Factoring lender can help you focus on other areas of your business, choosing a bad partner with poor customer service history can potentially upset your clients.


Here at Skipton Business Finance, we understand that there are some positive and negatives of Invoice Factoring. We are here to help your business every step of the way by improving cashflow and allowing you to plan for sustainable growth. We are here to listen to your business aspirations and help you guide you on that journey.