Factoring & Invoice Discounting - The Advantages of Factoring.
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Cash flow and funding
Ultimately You maintain your working capital and maximise your companies cashflow.
As opposed to an overdraft which could raise maybe 40-60% of the outstanding invoice, factoring can raise over 80% on your outstanding invoices. Overdrafts, mortgages and secured assets used to obtain loans, also have to be continually re-worked costing you time and money.
You can arrange a preliminary "credit line" which increases as your business improves.
Because a factor can take the responsibility of recovering debt and outstanding invoices a factor can save you time, better spent on running your own business. A factor can also take control of your sales ledger unless you go for invoice discounting.
You can take advantage of the factor's credit control system to help assess the viability of any potential customers or check the credit rating of your current customers. This helps you make informed decisions about your companies trading options.
Non-recourse factoring protects your business against bad debts.
Export factoring can reduce the risk of doing business overseas, exporting to other countries and receiving payment in other currencies, hopefully your factor will have some experience branches or contacts in a designated region, and enable your transactions to run smoothly.
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