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Factoring Companies

Category: General — Paul Morgan on January 9, 2013

Factoring companies provide firms with a vital service. They help thousands of firms to gain access to the money they need to prosper and grow.

Cash is the lifeblood of business

Without easy access to money, staying in business and expanding can be difficult. Virtually every firm needs a little extra money at some point. This is true regardless of the financial climate.

In a recession, firms need cash to help take them through quiet times. To stay in business during flat times of the year, they may need to borrow money to pay their overheads. For example, many retailers just need to tick over until Christmas when they can sell enough to pay off loans and tick over for the rest of the year.

During boom times, many firms want to grow, but do not always have the cash to do so. Even in a recession, some firms want to expand. They want to take advantage of the fact that other firms in their industry are going out of business by buying them up or buying their stock, products, and plant. Needless to say, this is not easy to do without quick and straightforward access to money.

The problem

The problem is that extra cash is not easy to generate quickly. Even well established, profitable firms can find borrowing money difficult.

The conditions of many loans are very restrictive. In addition, arranging loans from traditional financial institutions can take a long time. For firms operating in today’s fast moving business environment, this is far from ideal.

Factoring companies can help

Fortunately, there is an alternative way to borrow money, called factoring. This is a form of finance to which the majority of firms can gain access easily and quickly.

Factoring is a way for companies to borrow money against what they are owed. One of the most common types is invoice factoring. Companies owed £3,000 by another company can borrow up to 90% of what is owed from a factoring firm. This form of finance can potentially be set up in days. When the customer pays the invoice, the debt owed to the factoring company is paid along with the fees.

At Invoice Finance Scotland, we consider ourselves one of the most innovative and flexible factoring companies available. We pride ourselves on coming up with new ways for firms across all industries to raise the money they need to take advantage of new business opportunities or simply make it through to the next trading month. Our service can be tailored to meet the needs of every firm.

'Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.

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