- 17 Jul
Factoring For Decorating New Build Houses
It is quite common for us to come across businesses that don't understand the business financing options that may be available to them.
Decorating New Build Houses
This was the case recently with a company that provide decorating for new build houses and homes, supplying customers in the construction sector. They didn't realise that factoring was possible for businesses in their sector, dealing with construction businesses. Therefore, they had previously traded on either on cash terms, or on a credit card basis, which had been very limiting for the expansion of the company.
This business had come across some of the material that we post online, explaining the range of options available to construction sector businesses, and they had contacted us to see if factoring was a possible option for them.
Factoring To Offer Credit Terms Instead Of Cash Or Credit Cards
We were able to arrange a recourse factoring facility, with a small independent factoring company, that are able to offer them a first class service in terms of providing credit control (to chase up debtors for payments where needed).
Their new facility will also offer them prepayments against their sales, which means that they are still receiving the majority of the value of their sales immediately, although they are now able to offer their customers credit terms. This will hopefully make their offering much more attractive to the house builders that they sell to.
Expansion Finance That Grows
In this way, factoring is expected to help them grow their business turnover, by enabling them to offer credit terms to customers, while still enjoying the benefits of receiving cash against those sales immediately.
Businesses that are unable to offer credit terms to customers often compare poorly when a customer has access to a range of suppliers, and others are prepared to give them a credit account.
Factoring is a great option if you are looking to expand your business, as the amount of funding provided is linked directly to the amount of sales that you make. This means that the finance grows in line with the size of your business, which is not the case for traditional forms of finance such as overdraft and loans. This is another great example of how businesses dealing with house builders in the construction sector can benefit from the cash flow advantages of using factoring against the provision of decorating services.