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FACTORING AGREEMENT

Entering into a factoring agreement can help free up cashflow as soon as a sale has been made, thus bridging the gap until the customer pays.

The process of factoring is such that, when an invoice has been raised and is subject to credit terms, namely payable within 30, 60 or 90 days, the finance company will immediately advance typically 75-90% of the invoice value.

Once the payment from your customer has been received, the factoring company will credit the remaining 10-25% of the invoice.

The factoring company will also become the credit control arm of your company by contacting the customer if a payment is late and taking all necessary steps to recover the debt. This is the key difference to Invoice discounting.

For further information please do not hesitate to contact us.

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