• Part 2- Factoring Has Advantages Over A Business Loan

    Why factoring has advantages over business loans.

    Following on from my previous post about why factoring can be better than a loan, these are the remaining advantages of factoring over those provided by a traditional loan.

    You Receive A Credit Control Service

    One of the key aspects of a factoring facility is that you receive a credit control service, to collect in your outstanding sales invoices.

    This can often replace the need to undertake this task yourself, or the need to employ credit controllers. Depending upon who undertakes the task at present, this will either free up a significant amount of your time, or save a significant amount of cost if you are having to employ credit control staff.

    Factoring can be cost neutral, or even profitable in some cases. Once you take into account benefits such as the credit control service, the cost savings from these can be offset against the cost of the facility. In the case of factoring, this can significantly reduce the overall cost so the facility, or even result in a profit situation.

    Customers May Pay More Quickly

    According to figures from the industry body, customers tend to pay factoring companies more quickly than they pay their suppliers. This can create a cash flow benefit to your business.

    Factoring Companies Often Release More Funding

    When you compare the amount of finance that you're able to raise through a factor, with the value of the loan that a finance company is prepared to offer, it is often the case that factoring will release a greater amount of money.

    Bad Debt Protection Is An Option

    In addition to the benefits stated above you have the option of adding bad debt protection onto your factoring facility. This can protect you against your customers becoming insolvent and being able unable to pay you - preventing bad debts.

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Examples of just a few of our finance partners:

pulse cashflow finance
lloyds bank