Commercial Finance in Glasgow
Glasgow is a city that has a long commercial history. There is evidence that in pre-historic times the area was used for trade. By the 9th Century, it had grown into a city. For the next 800 years it traded in local products, but when in the 17th Century trade between countries became more common, Glasgow became a major international trading centre.
Naturally, with commerce came a need for finance, so the city has always had a strong financial sector. It is now home to a large number of Scotland’s biggest companies, and it is one of Scotland’s largest centres of employment. The city’s International Financial Services District is home to hundreds of financial institutions.
There are plenty of traditional lenders that offer business loans and overdrafts, however, alternative forms of finance are also available. Scottish factoring companies based in the city offer invoice discounting and invoice factoring.
Increasingly, firms based in Scotland are waking up to the benefits of using alternative forms of finance. Some have been turned down for loans and overdrafts by their banks. Others are unable to wait weeks while a decision is made on whether their loan application is acceptable. In their search for alternative sources of funding, many Glasgow based firms have discovered the world of factoring and found the answer to their cash flow problems.
How invoice discounting works
The way it works is simple and easy to understand. If a client owes a company £2,000, they can ask factoring companies to lend them money against those outstanding invoices. Most factoring companies will lend up to 85 per cent of the value of each invoice, so in this example a company could potentially borrow £1,700 against their owed invoices. Money owed is effectively being used as collateral to secure loans.
The lending process is set up so that customers are none the wiser. Invoices are paid normally when the money borrowed is paid back, along with the interest and fees owed. Any money left over after fees is kept by the company.
The advantages of borrowing money against invoices
There are many advantages to using this alternative form of borrowing. Invoice factoring can be set up quickly, in days rather than weeks. In addition, it is a relatively inexpensive way of borrowing money over the short term.
It is a flexible way of borrowing money. Each company decides which invoices it is going to borrow against and how much it borrows against each one.
Who is invoice discounting for?
The great thing about factoring and discounting is that it is a financial service practically any business can use. Factoring companies will lend money to firms from any sector; all they need to apply are some outstanding invoices. The biggest and best firms lend money to start up businesses, and it is a form of financing that is also widely used by PLCs.
At Invoice Finance Scotland, we provide tailored invoice lending services to hundreds of firms every year. Our experience allows us to find the right solution for you. We have spent years working in the sector and know how to make invoice-funding work for you and your business.