Invoice Factoring: The Flexible Way to Manage Cash Flow

If you’re a small business owner, you know how difficult it can be to manage cash flow. You may have trouble getting your customers to pay their invoices, you may not have the right type of credit or collateral, and traditional financing methods might not be an option for you. So, is factoring flexible and a good choice for you? The answer is yes! To find out how invoice factoring works and why it’s an important option to consider for financing your business and maintaining continued growth, carry on reading below.

Is factoring flexible for small businesses?

In the past invoice factoring was very restrictive and expensive. Unfortunately, invoice factoring has a bad reputation dating back from the early 1980s but modern factoring is a world away from that. Gone are the days of being tied into very long, and difficult, contracts with expensive costs. Invoice factoring is now flexible and a recognised tool that small-medium businesses can use to manage their cash flow, grow their business, and outsource their credit control.

You choose which invoices to factor

Historically when you entered into an invoice factoring agreement you had to factor all of your invoices. Whilst for most businesses this is still often the best option, today’s funders are more flexible. So if required, you can decide which invoices you want to factor.

Factoring gives you access to the value of invoices before they are paid-typically within 48 hours of raising them and together with this funding manages every aspect of your credit control, saving you time and money.

Factoring is a powerful alternative to traditional finance

In the past factoring was used as a last resort finance source for businesses who were struggling or had a bad credit score and couldn’t secure finance from more traditional lenders. Today factoring is a completely different beast! Growing companies can use it to effectively manage cash flow and outsource credit control to
a professional company which in turn frees you up to focus on the future and growth of your business.

When a business enters a factoring arrangement, whilst the funder is responsible for collecting payments from your customers themselves, they do not have any say in who you work with or which projects you take on. You still make all the critical business decisions and remain in full control of your business.

We are happy to help and are experts in invoice factoring. To find out more information about how invoice factoring can be beneficial for your business, contact us today.