Factoring and Invoice Discounting
Accounts Receivable Factoring and Invoice Discounting can accelerate your cash flow by raising finance against outstanding invoices. Typically, you will be able to borrow between 80–85% of the value of the invoice.
Accounts Receivable Factoring is where a business sells its Accounts Receivable (invoices) at a discount to a Factoring company which will chase debts for you and pay you a fixed percentage of invoices within a pre-arranged time. The balance of the invoice, minus the factoring company’s charges, is paid once a customer settles their account. Effectively, the business is no longer dependent on the conversion of accounts receivable to cash from the actual payment from their customers.
With invoice discounting you are responsible for chasing the debt but can raise an advance on an invoice. Invoice discounting offers valuable support services and credit insurance. It is very important that the right Accounts Receivable Factoring and Invoice Discounting company is used which is where GP Asset Finance Ltd / GP Associates advice is invaluable. Up to 80% of trade debtors can be advanced on an ongoing basis with the remaining 20% paid when the provider is paid. The Accounts Receivable Factoring and Invoice Discounting facility is therefore very flexible and grows with the company.
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