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New to factoring?

Factoring, its probably not what you think in terms of the word, but if you’re a small to medium business, you need to get to know factoring intimately, maybe buy factoring a drink and get to know them. Ok we’re joking, but it’s always good to know your options when it comes to finding funding, cash, capital for your business.

The great things about factoring is its simple, its quick and its cheap. Think about a credit card, if you have 0% for a limited period you use it to its full potential. Factoring is quite the same. The only thing is you will only always pay a small fee to use the facilities provided by a factoring lender.

So, what is factoring, its a way of gaining funds quickly using the invoices you need paying by your customers. Where you may end up waiting up to 90 days to have your invoices paid, factoring can give you the cash tied up in your invoices usually within 24 hours. The other bonus about this system is that the factoring lender will help you chase the payments owed to you by the clients. Basically the factor lends you the money, then chases your clients for payment, so in retrospect they end up with the money they have lent you. It’s usually around up to 95% of your invoices to start with, then when they receive payment from your clients they pay you the remainder, minus a small fee! Its so simple, and thousands of companies across the UK are becoming wise to the possibilities factoring lends.

It;s quick, its simple, there is no limit to the amount you lend whether its the total of all of your invoices or just a select few. You can, if you choose even do everything yourself minus the lending money bit. It’s incredibly flexible, which makes factoring a brilliant choice for business.

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