A factoring service pays you an agreed percentage of your invoice while they wait to be paid by your customer. The great thing is that as your business grows, and you increase the number of invoices issued, so the amount of accessible cash grows. This means you can continue to pay for business expenses, new assets and pay wages, without needing to renegotiate terms with the factoring company.
Renegotiating bank finance can take longer to arrange, meaning you might have to miss opportunities while you wait for decisions to be made. Debt Factoring providers work much faster, often making decisions within days of you approaching them with the information and documents they need.
When you’ve agreed terms between you and the debt factoring company, you can receive anything from 80 to 95 percent of the invoice up front, within 24 hours of the invoice being issued. The remainder of the invoice, less the factor’s fee, is paid as soon as the invoice is paid by the customer.