Debt factoring is when a business raises an invoice for work completed, passes this to the debt factoring provider who then follows up the payment from the debtor on behalf of their client.
The debt factoring company will chase the debtors for payment of the invoices and once received will give the remaining 10% to the small business, minus their fees for providing this service.
The business will be given up to 90% of the invoice value almost immediately from the point of raising the invoice, therefore reducing the cash deficit for the small business.
Debt factoring is proven to help businesses grow and prosper and is an excellent alternative to a bank overdraft.
The cost of debt factoring is split in to three key areas:
All reputable finance providers will be transparent about the fees and costs related to the facility prior to signing the agreement.
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.
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.
Great service so far
14:20, August 27, 2021
Game-changer for our transport business
16:29, August 07, 2021
Excellent customer support
11:53, August 06, 2021
Excellent, friendly and effective
11:37, July 30, 2021
09:28, July 18, 2021