factoring

Time to Fill the Funding Gap

Time to Fill the Funding Gap

For a small or medium sized enterprise to survive, funding is essential.  New start-ups need the capital to first establish themselves, whereas those further down the line may need income to stabilise the business or to grow and expand into new markets. Many look to the banks to provide this funding however, in the current economic climate, many banks are not providing lenders with the capital they need to make a success of their venture.  For example, in the second half of 2011, more than 60,000 loan and overdraft applications from small and meduim enterprises worth as much as £3bn were rejected by the high street banks. Alternative forms of finance If small and meduim enterprises are struggling to secure finance from traditional lenders, it follows that in order for them to survive they ... »

Factoring: Start-ups Have a Funding Shoulder to Lean On

Sema Fongod of Invoicediscounting.uk.com explains how factoring can be a useful business tool for start-ups in this difficult economic climate. To be successful in your start-up venture, initial capital investment is the major issue to be focused on. New business owners tend to depend on the banks to raise capital. However, banks and other financial institutions are making life difficult for start-up owners as their credit terms are getting more and more stringent. Start-up capital isn’t just about raising finance to get your business off its feet. It’s also about ensuring a healthy cashflow for meeting the daily operational costs of your business once it’s launched. Where do you raise funds to kick-start your business and provide on-going working capital? Factoring is a funding solution t... »

The Difference between Factoring and Invoice Discounting

The Difference between Factoring and Invoice Discounting

Both factoring and invoice discounting are financial services that enable businesses to release the funds tied up in unpaid invoices. Both involve a third party company advancing money against outstanding debtor balances. There are clear differences between factoring and invoice discounting: With factoring the third party company takes control of the sales ledger, chasing customers for settlement of invoices and managing the credit control of the business. They are also responsible for processing the payment of invoices, meaning that your customers are fully aware of your business contract with a factoring company. With invoice discounting your customers are unlikely to be aware of your relationship with a financing company. You maintain responsibility for the sales ledger, payment chasing... »

Debt Factoring and Invoice Discounting

Financial services companies that provide businesses with debtor finance, secured against unpaid invoices are known as Factors and Invoice Discounters. Factors buy your trade debts and typically will pay 80% to 85% as soon as they receive a valid copy invoice. The balance, less charges, is paid when the customer pays. The Factor collects the debt from your customer directly but will usually agree collection policies with you, in order to ensure faster customer payment without loss of goodwill. Some Factors also provide bad debt insurance. With invoice discounting responsibility for collection of debts remains with you and the service is normally undisclosed to customers. Payments that you receive are paid into a bank account administered by the Invoice Discounter and you are then credited ... »