News & Blog

Contact Us

A Guide to asset based funding

There are so many options you can take as a business, to add funds to the pot. You may need to purchase materials, you may need to buy more vehicles for fleet, it may just be a case that you need to pay your staff and taxes.

As you know at Select Factoring, we offer Factoring, Invoice Discounting and Selective factoring which are 3 solutions to business funding.

Another option would be Asset Based Funding, what is it I hear you cry? Simply put, its possibly a posh way of saying Factoring.

As a business you have assets in the money tied up in your sales ledger, your invoices.

Using this money, means you can have funds up to 95% in approximately 24 hours. The positives to this solution is you are only using money which is actually owed to you by clients, and by using a Factor or Lender, if you wish they will carry out all the work needed to obtain payments from your clients.

You use your assets, and you don’t have to use all of them. If you wish you can use all of the assets in all of your invoices to gain instant capital, this is known as Factoring, otherwise you can select certain invoices for the amount of money you need, this is known as selective factoring. Both processes request you to send out invoices to your clients, then you pass on the information to the Factor or Lender. They then release the capital held up in these invoices to you, and they will endeavour to chase payment from your clients. Once everything is paid, you receive the rest of the amount of the invoice minus a small fee. This is a great way to gain funds from your assets quickly, without having to wait up to 90 days for payment.

 

Related Posts

Leave Comment




Helping your business grow

Contact Us
Contact Us

|T 07578561997