For a business that is seeing a period of significant growth and would gain from easy access to capital, working with a company offering invoice factoring in Glasgow could offer an appealing alternative to an overdraft or a loan. It is a more flexible option and involves looking at streamlining accounts on a mid to long-term basis – as opposed to receiving one lump sum with a repayment plan.
The first thing that a business would do is find a company providing invoice factoring to Glasgow businesses. Once they are working with a company, the factor will typically audit the accounts and books to establish whether or not the sales ledger fulfils the criteria. Should both parties be happy to progress, the invoice factoring company sets up an account for the business, which allows it to make the customer invoices payable to the factoring company. The business then receives an agreed upon amount, which is typically 85 per cent, of the invoices value. When the invoice factoring company has been paid by the client, it then pays the balance to the business, minus fees.
There are a number of benefits for businesses using invoice factoring in Glasgow. The main one is that allows them to access ready cash when needed, as well as a reduction of resources and time spent on collecting debt. It also allows the company to raise up to 85 per cent or more on outstanding invoices. An overdraft that is secured against invoices would only raise up to 50 per cent. An established company providing invoice factoring for Glasgow businesses is also able to negotiate a credit line that grows in line with their own expansion.