When lending institutions in Glasgow are having problems with capitalisation and are not in a position to lend, it presents an issue for businesses in the area who are in need of capital to grow their business. They are forced to seek an alternative solution, or try their best to keep their head above water. There is a solution, however, that is becoming increasingly popular; Glasgow invoice factoring.
Glasgow invoice factoring resolves issues with cash flow that have resulted from clients paying their invoices within a period of 30 to 60 days. It isn’t uncommon to extend 30 day payment terms to commercial clients, but there are many SMEs who are not in a position to wait that long before they are paid. There are expenses to maintain that often require immediate attention, such as rent, payroll, supplier and payments.
Glasgow invoice factoring uses a simple method. Once the product or service has been delivered, the invoice is sold to an intermediary known as a factoring company. They evaluate the credit of the client liable to pay the invoice, and if it is acceptable, they buy the invoice from you at a slightly discounted rate. This provides a business with faster income that may be used to pay for operation expenditure, or to grow the business.
Most transactions in Glasgow invoice factoring are structured with two separate payments. The first payment is called the advance, with a value of approximately 80 per cent of the total of the invoice. The second payment covers the 20 per cent reserve, minus fees, and is rebated after the invoices have been fully paid.
The best advantage about Glasgow invoice factoring is that it isn’t difficult to obtain. Most SMEs can get it as long as their clients are solid, and their assets don’t have any encumbrances. It is an ideal solution for businesses that are not in a position to wait 30 to 60 days to be paid.