Regardless of their size or the industry they operate in, most companies find themselves in need of additional finance at some point. Sometimes, this is because of cash flow issues caused by seasonal fluctuations. Other times, it is because a firm wants to expand and take advantage of new and emerging business opportunities. Needing to borrow money is not a negative thing; it is something even large and successful firms need to do from time to time.
For a firm looking for finance there are several possibilities. For some firms, it is still possible to follow the traditional route and ask for a loan from a bank or other high street financial institution.
However, here we want to consider the alternative route of using a factoring broker to borrow money. In particular, we are going to look at why borrowing money in this way is beneficial for most firms.
The biggest advantage of using a factoring lender is the speed of service, and there is very little paperwork needed to arrange a loan through a broker. Most of the loans are short-term, so there is no need for a business plan. The decision is made and the money appears in the borrower’s bank account within days rather than weeks.
Free credit control
With this form of borrowing, the factoring broker can be the one who is responsible for collecting the money owed on the invoices used as collateral. The fact that they look after this aspect of credit control means that the borrower is free to focus all of their time and energy on their core business.
Clear terms and conditions
Factoring brokers are clear about how much they will lend against each invoice. The firm that is borrowing the money knows in advance how much money will arrive in their bank account and when. Importantly, firms also know how much they will be charged for each loan.
It is up to the firm borrowing the money how many of its invoices it borrows against. This means that if a firm does not want a particular customer to know that it is borrowing money, it can simply avoid using that particular firm’s invoices as collateral. Firms can borrow this way occasionally, or month after month, until their cash flow reaches a point where they no longer need to borrow for a while.
Suitable for all kinds of firms
Perhaps the best thing about invoice factoring is the fact that all kinds of firms can take advantage of it. All businesses from sole traders to multinationals can use a factoring broker to raise the cash their business needs to grow and prosper.
We can help you today
If you are interested in borrowing using factoring, speak to us or write to us at Invoice Finance Scotland. We are a well-established factoring broker with a reputation for providing a fast, affordable and high quality service that is flexible enough for practically any firm to be able to benefit from.