The process that exists between a company providing invoice factoring and Edinburgh businesses is a simple one. Typically, accounts receivable exists solely between a business and its customers. Invoice factoring enables the business to bridge the gap present between when goods are provided and when payment is made. This is achieved by that business turning to invoice factoring in Edinburgh, as a factoring company buys the accounts receivable in exchange for a percentage. Once the client has made the payment, the business receives the balance, minus fees.
Employing the services of invoice factoring, Edinburgh businesses are able to benefit as it allows them to access funds quicker. They may deal with your client directly but typically, there is no problem with changing which entity receives the payment.
There are a number of advantages in using this form of financing. Firstly, eligibility is based more on the business’s creditworthiness as opposed to the business itself. This makes it an appealing option to new companies looking to acquire start-up capital or funds to expand. It is also advantageous if they have a limited credit history or if they are finding that it is difficult to acquire finance in an unstable market.
Secondly, utilising invoice factoring in Edinburgh can result in a faster response than other options. An established factoring company will provide a decision in as little as seven days, for example. When the information on accounts receivable has been transferred, the company can receive the funds in less than 24 hours. It is rare to see such speed in many markets.