Due to a surge of the use of alternative funding, many companies have come together to form a new consortium which can offer small to medium enterprises a range of funding.
The Next Generation Funding Consortium (NGFC) aims to offer a full range of funding to entrepreneurs. The demand for such a service came from the fact that 50% of small to medium businesses were in the high risk rating.
Due to the past few years and economic crisis, we have seen many companies go under due to the lack of funding. Although it is not a modern service, factoring and invoice discounting tend to be something that not many people know about, despite it being an incredibly flexible way of raising funds for business.
It works using invoices that companies have to send out to clients, but rather than waiting months for dribs and drabs to be paid, factoring lenders advance the cash to companies. Which means that the money is upfront and allows companies to continue with business.
There are a range of options to choose from, you can “sell” all of your invoices to a factoring lender, or a select few, then they can continue to chase your clients for you, ensuring everything is paid.
Or you can simply choose to continue with your own accounts and credit control.
The fact of the matter is, you can have that cash, generally within 24 hours and using it to expand or pay staff, whatever you need to do. It has helped many companies avoid the clutches of shutting down or going under.
Compared to a loan or using personal funding, factoring is very cost-effective and is a small percentage of the money your are advanced by the lender.
There is a trend now, where factoring is becoming much more popular, which is great for the team at Select Factoring.