How to Compare Invoice Factoring lenders?
Invoice factoring is a financial solution that allows businesses to access cash tied up in outstanding invoices.
Instead of waiting for clients to pay, a business can sell its invoices to a factoring company. The lender will advance a percentage of the invoice value as soon as the invoice is raised.
Comparing different invoice factoring options can be a daunting task. It is important to find the right solution for your business.
Here are a few factors to consider when comparing invoice factoring options:
- Cost: Invoice factoring fees can vary greatly between providers. By using a broker we can help compare quotes and understand exactly what is included in the fee. Some invoice factoring companies charge a flat fee per invoice, while others charge a percentage of the invoice value.
- Advance rate: The advance rate is the amount of cash a factoring company will advance against an invoice. The advance rate can vary from 70-90% of the invoice value. It is important to understand what you’ll receive from each factoring company.
- Invoice requirements: Different invoice factoring companies have different requirements for the invoices they will factor. Some companies will only factor invoices from certain industries or with certain payment terms. It’s important to understand what invoices each company will accept.
- Credit checks: Some invoice factoring companies will perform credit checks on your clients, while others won’t. If a factoring company performs credit checks, it may be more selective about which invoices it will factor. This could impact the amount of cash you’re able to access.
More things to consider
- Repayment terms: Invoice factoring is a short-term solution, so it’s important to understand the repayment terms of each factoring company. Some companies require repayment as soon as the client pays the invoice, while others may offer more flexible repayment options.
- Customer service: The level of customer service provided by invoice factoring companies can vary greatly. Some companies may offer a dedicated account manager, while others may have a more basic customer service offering.
- Reputation: It’s important to do some research and find out what other businesses have experienced with a particular invoice factoring company. Read reviews and check out the company’s Trustpilot rating to get an idea of their reputation in the industry.
By considering these factors, you’ll be able to compare invoice factoring options and find the right solution for your business.
Invoice factoring can be a great way to access cash tied up in outstanding invoices. It’s important to do your research and find the right provider for your needs.
How to apply for Invoice Factoring?
Applying for a Invoice Factoring is very simple. Enter your details below or call 0161 8211478 to speak with one of our specialists.