A factoring broker can help virtually any type of size of firm to raise the cash it needs to grow its business. Factoring is a financing tool that has been available for decades, but is one that many firms are still not aware of. This is a shame, because invoice factoring is one of the easiest and fastest ways a firm can raise cash.
How factoring works
Factoring is simple; it just means using the money a customer or customers owe as the collateral for a short-term loan or loans. When the customer pays the invoice, the loan is paid back along with the interest and loan fees. The amount that can be raised using factoring varies, but typically, a firm can borrow around 85-90% of the value of each invoice. Most factoring firms will also chase firms that pay their invoices late should you want them to – which is an additional potential benefit of borrowing using invoice factoring.
Most firms have outstanding invoices, so it is a form of finance that the majority of firms can use. A factoring broker makes the process of arranging a loan this way quick and easy. In addition, the acceptance rate is high. It is even possible to raise money against invoices generated for foreign customers or organisations.
The money generated by invoice factoring can be used in any way the business owner wants. Some firms borrow this way to allow them to pay wages during a seasonal dip. Others borrow using invoice factoring to allow them to buy the raw materials they need to take on and fulfil a big order.
Factoring is a great way to get over the cash flow issues that every firm has from time to time. Invoice financing is a form of borrowing that can be used repeatedly. There are no restrictions on how many invoices you borrow against at any one time.
If you are looking for an experienced factoring broker, contact us at Invoice Finance Scotland. Over the years, we have helped thousands of firms to raise the cash they need using invoice factoring, and are ready to help you to take advantage of this great financial tool as well.Factoring Broker