Firms across Scotland are benefiting from innovative financial products, which enable them to raise the money they need to grow their businesses. The use of factoring by Glasgow firms is growing in popularity as more firms try it and like it.
The dictionary definition of factoring is the selling of a receivable debt to a third party, known as a factor. Today, this usually means invoice factoring.
How invoice factoring works
The best way to understand invoice factoring is to look at an example.
A client owes a firm £1,000. That firm can borrow up to £900 against that invoice from a third party. When the client pays their invoice, the debt is paid along with a pre-agreed fee for the loan.
Firms suitable for invoice financing or factoring
It is possible for most firms to use factoring. Glasgow firms of all kinds use this form of finance every day. It does not matter what industry they are involved in, if a client with a good credit history owes them money they can borrow against that invoice. Even firms that have only been in business for a few months could potentially raise money using invoice factoring.
The advantages of invoice factoring in Glasgow
Borrowing money against outstanding invoices is a great way of improving cash flow. It is a quick and easy way to arrange a short-term loan.
Using factoring, certain Glasgow firms have even been able to speed up the rate at which their customers pay their invoices. This happens because credit control and collection services are included in our invoice factoring service.