Debt Factoring UK

Compare debt factoring offers online and have lenders compete for your business. Beat the banks with ABC Finance.

Rated Excellent on Reviews.co.uk

What is debt factoring?

Debt factoring is a financial product for businesses that allows them to sell their accounts receivables to a factoring provider to improve business cashflow.

It is designed for businesses that operate on a B2B basis, on delayed payment terms of 30 days, 60 days or 90 days. It is an ongoing form of business finance that is designed to release the cash tied up in unpaid invoices.

As a form of invoice finance, debt factoring, also known as invoice factoring, is a long-term solution designed to enable businesses to grow.

How does it work?

It works as follows:

Invoice raised – You raise an invoice as you usually would and provide a copy to your factoring provider, also known as your factor.
Receive up to 95% of the invoice amount – Within 24 hours of the invoice being raised, your factor will pay you an agreed percentage of the invoice value, usually 90-95%.
Your factor chases payment – Your funder handles the whole credit control process to work with your customer to ensure the invoice is settled on or before the due date.
Payment received – When the invoice is settled, you receive the remaining funds, minus your agreed facility costs.

Read more – Invoice Finance For SMEs

Are there other types of factoring?

Yes, there are different types of factoring, the main ones are:

Spot factoring – Spot factoring, also known as selective invoice finance, allows you to fund either a single invoice or a selection of invoices as you choose.
Recourse and non-recourse factoring – Recourse and non-recourse factoring differ in whether your business or the lender is responsible for the financial losses faced through non-payment of invoices.
Reverse factoring – Reverse factoring is a financing option where a 3rd party financial provider finances the supplier on behalf of the buyer. This process is made up of the buyer, supplier and finance provider and is designed to give a buyer longer to settle an invoice, while allowing the seller to receive funds immediately.

Is debt factoring right for my business?

If your business works on delayed payment terms of 30 days to 90 days and operates business to business (B2B) then there is a great chance that debt factoring will be a good fit for you.

Whether factoring is the ideal choice will depend on your specific circumstances.

For example, if you’d rather retain control of your credit control, invoice discounting may provide many of the benefits while allowing you to do so.

If you’d like to know more about whether factoring is a good fit, talk to one of our invoice finance experts or compare offers from the leading lenders using our online tool.

What are the pros and cons of debt factoring?

The pros of debt factoring are:

Improved cashflow – It’s designed to improve cashflow, and it does it on an ongoing basis, giving you the boost you need to grow your business without the usual strain on your bank balance.
Frees up time and resources – As credit control is managed for you, factoring can save significant time, resources and therefore money.
Improved supplier negotiation – As your business cashflow is improved, you may be able to negotiate better terms with your suppliers.
Receive funds for unpaid invoices – Facilities with bad debt protection enable you to still get paid, even if your customer fails to settle their invoice.

The cons to consider are:

It costs money – While it’s a relatively low cost way to borrow, it still costs money and can impact your overall profitability.
Non-payment can be a problem – Facilities without bad debt protection can result in your lender chasing you for the money back if your customers fail to pay their invoices.
Your factor will chase your customers – As your funder takes control of the credit control process, your customers will be chased for payment, taking part of your customer relationship out of your hands.

Will I be eligible?

If you own a UK business that operates B2B on delayed payment terms, there is a great chance that you’ll be eligible.

We can help business across a range of different sectors, including recruiters, wholesalers, transport businesses and even startups.

If you’re unsure whether you’ll be eligible, get in touch today, and our team of experts will be able to quickly confirm whether or not you could be funded.

What is the best way to compare offers from different funding providers?

The easiest way to compare debt factoring offers from different funding providers is through the ABC Finance invoice finance comparison tool.

Our platform enables you to quickly compare offers from different providers without needing endless phone calls and negotiations.

Instead, simply input your details and requirements, and within minutes, the market’s leading lenders will begin competing for your business. Each lender will upload their most competitive terms in an attempt to win your business.

Once you’ve received an offer that you’re happy with, simply progress your application with a single button click.

While we always want you to remain in control, we have a team of experts on hand to answer any questions and help you navigate the options available, should you need them.

Get started now and secure the best debt factoring deal in minutes.