What is Debt Factoring and how does it work?

Debt Factoring is another term for Invoice Factoring and occurs when your accounts receivable is raised by a business and then passed onto a Debt Factoring company. This company will release up to 90% of the invoice’s value and then chase the payment from the debtor on your behalf. Once received, they will give you the remaining value of the invoice, minus their fees for providing the service.

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With Hitachi Capital Invoice Finance, we handle your credit control, allowing you to concentrate on other areas of the business instead of chasing up late payments.

As your business grows, so does the available funding. With Debt Factoring you don’t need to negotiate new terms as your flexible funding line increases with your turnover.

What are the benefits of Debt Factoring?
    • Improved cash flow - release money tied up in unpaid invoices and boost your cashflow
    • Flexibility - your funding line increases at the same rate as your turnover meaning that you don’t need to renegotiate terms
    • Save time - relieve your business of the burden of credit control and concentrate on your core business 
    • Bargaining power - Debt Factoring can help you to negotiate better terms with your suppliers
    • Faster growth - grow your business at a much faster rate due to the flexible funding line

Awards and Accreditations

Best Invoice Factoring Provider 2020

Best Invoice Factoring Provider 2019

Best Invoice Finance Service 2018


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Please note that costs are an estimate only and are based on the entered values. Your final quote may change once a Business Development Manager has assessed your business in more detail.

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0808 250 0859

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Why choose Hitachi Capital Invoice Finance?

 

      • Quick access to funds – within 24 hours of first appointment to money in your account (dependent on turnover)
      • Revolutionary digital onboarding with digital signature - we can securely and remotely sign up new clients
      • Same day availability on your funds – with our client trust account 
      • 6 month trial period followed by a rolling contract - we don’t tie you in
      • Award winning service – Business Moneyfacts award winners 2 years running
      • Simple products with transparent fees and pricing – no hidden nasty surprises
      • No uncleared effects – saving you money

Debt Factoring FAQs

Is Debt Factoring expensive?

The cost of debt factoring is split in to three key areas:

  1. A set up fee for the administration of establishing the facility.
  2. A service fee which covers the admin costs and management related to your account, which is then charged as a percentage of your gross turnover.
  3. A finance fee which is the cost of the money you draw down. This is charged daily against your outstanding balance.

All reputable finance providers will be transparent about the fees and costs related to the facility prior to signing the agreement.

Is Debt Factoring long term?

Debt Factoring can be both a long and short term form of borrowing. The majority of businesses incorporate Debt Factoring in to their general business operations, with associated costs factored into overall profit margins, tending to view the facility as more of a long term solution.

 

 

How Does Debt Factoring Work?

Debt Factoring is another term used to describe Invoice Factoring - a process whereby a business will raise an invoice for work completed, pass this to the Debt Factoring provider who will then chase the payment from the debtor on behalf of their client.

 

What is Debt Factoring used for?

There are a variety of reasons companies utilise Debt Factoring services for their business. For starters, Debt Factoring helps companies reduce their cash flow concerns by receiving payment of invoices straight away. Customers who take a while to process your invoice payment can put a strain on your cash flow, and Debt Factoring with Hitachi Capital Invoice Finance gives businesses an option to receive cash in 24 hours, as opposed to waiting 30, 90 or even 120 days to get paid.