What should I consider regarding factoring?
Factoring, or invoice financing in English, is becoming increasingly popular and is mostly used by rapidly growing companies. It involves selling or borrowing against invoices from a bank or other financial institution. It's somewhat similar to taking out a loan, with the difference being that it happens faster – as a business, you gain immediate access to funds, while the bank or financial institution assumes the greater risk. This way, you don't have to worry if it takes a little time for your customers to pay, as you have less urgency to pay your own invoices. Previously, the advice was to carefully check who you were borrowing against your invoices, but this has become less stringent as factoring becomes more common. You can find the most common and best providers in the market with us at BusinessWith. Here, you can easily compare and then choose who you want as your factoring partner.
What type of factoring should I choose?
Depending on your needs, there are different ways to use factoring or invoice financing. Factoring with or without recourse are two of the most common options. Factoring with recourse means that you and your company must pay the invoice if the factoring company does not receive payment for it. Factoring without recourse means that the factoring company covers the cost if you do not get paid for your invoice. Without recourse is therefore the least risky option for you. BusinessWith helps you choose a factoring partner. Here you will find the best providers in the UK and can easily compare using the filter where you can filter by features – start comparing now in our guide.
Quick Guide
Quick Guide
The Main Benefits of Factoring
Avoid taking risks and get cash quickly – with factoring you increase your company's liquidity. Good liquidity should not be underestimated; it is necessary for all businesses to have the capacity to invest forward. For example, it is not unusual for a startup to have a significant need for cash, but it may not be ideal to have a credit period shorter than a pinky finger. When you sell or borrow against your invoices, you can be more generous with your customers regarding the due dates on your invoices. You can simply relax and know that the money will come in.
Another advantage of factoring, or invoice financing, is that you decide which invoices to finance; it does not necessarily have to be all of them. Do you feel convinced that factoring could be a way for your business to unlock cash flow? Then you are welcome to start comparing the different tools or providers of factoring right now. We list the various providers available in the UK market, so you can find the best factoring solution for your needs. If you have questions, BusinessWith is of course here to help you.
