Factoring is a simple process of borrowing money against your business’s outstanding debtors, with an additional credit control function provided by the lender.  

​

It works well for businesses whose customers pay beyond agreed payment terms, providing month-to-month working capital funding. 

​

A typical factoring facility would be disclosed to your clients by way of an assignment notice, usually written on your company invoices.  

​

Factoring is generally suitable for all business types but as with invoice finance, you can only borrow against business-to-business sales transactions. 

​

The cost varies, normally ranging from 2.5 to 4% over base rate for the money borrowed, together with a service charge linked to gross turnover. ​

​

Subject to your business type and the risk associated to the sector you operate within, the lender will advance up to a maximum of 90% of your eligible debtors.

​

You can fund both domestic and exported sales, alongside protecting the ledger and debtors against bad debts.