Cash Flow Funding

The most common form of cash flow funding is invoice discounting and factoring. This allows you to release the value of your debtor book by way of cash in advance thus funding your cash flow exactly when you need it. Why wait 30 to 60 days – you need it immediately. These are explained in more detail below.
Does your business need a cash flow funding solution, are you facing insolvency?

Unlocking your cash flow leaves you in a healthier financial position to take advantage of opportunities arising allowing you to concentrate on running your company. Apart from a bank overdraft, cash flow funding is available in many forms for many reasons.

  • Invoice Discounting (Disclosed or Confidential)
  • Factoring
  • Confidential Factoring & Non Recourse Factoring
  • Senior debt
  • Asset Finance – releasing funds tied up in existing plant and machinery
  • Equity sale
  • Private and angel investors
  • Payroll Funding
  • Wageroll funding

Do you want free advice on cash flow funding?

Call us on 01453 872666. We will chat through your cash flow funding needs without obligation. If you want help with your funding requirements, we can arrange to visit you to discuss how you can move forward on your cash flow funding needs.
How does invoice factoring work?

The factor fully manages your sales ledger and provides you with credit control and collection services for all your outstanding debts. The invoices you issue upon a sale are sent to the factor who typically advances up to 80 to 90% of the invoice amount to you. The balance, less charges, is paid when the customer makes payment directly to the factor. The service is disclosed to your customer who typically receives a letter from the factor, or attached note to your invoice, containing payment instructions to the factor. Funds are typically released to you within 24 hours of issuing the invoice thus giving you the ability to fund your cash flow significantly earlier than your normal 30 day trading terms!
There are typically two costs involved: a service charge expressed as a percentage of sales factored and an interest charge for the cash advances. The service charge, covering sales ledger management, collections services and, if you wish, bad debt protection can range between 0.60% and 3.0% of turnover. The main considerations in determining the service charge are your annual turnover, number of invoices and number of customers. The interest charges calculated on the daily usage of funds is typically comparable to normal secured bank overdraft rates.
The advantages of invoice factoring to fund cash flow.

Funding is flexible and linked to your current and future trading levels and needs – as opposed to traditional finance which is based on historical balance sheet ratios. With this type of cash flow funding you can plan ahead more confidently, because you know that a fixed percentage of monies invoiced out will actually be available at any given time. Extra up-front finance gives you extra bargaining power in dealing with suppliers. You can take advantage, for example, of bulk purchase, or prompt payment discounts.

Access to credit ratings allows confident trading with new enquirers, ensuring that your hard work attracting customers is not wasted through bad debts.

Professional credit control gives speedier cash flow, providing freedom to grasp business opportunities. Cash flow is king.

If you have a cash flow funding requirement, call us on 01453 872666 or email. We will chat through your cash flow funding needs without obligation.