Invoice Factoring

Invoice factoring is a quick and easy way to boost your businesses cash flow. We’ve got everything you need to find the right invoice factoring service for your business. 

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What is Invoice Factoring?

Invoice factoring is a smart way to avoid the hassle of chasing unpaid invoices. Invoice factoring allows you to 'sell' the debt to a third party who then chases up the invoice on your behalf. Once the invoice has been paid, the factoring company pays you up to 90% of the invoice value - keeping around 10% as their fee.

Invoice factoring can free up your time to focus on more important tasks, increase profit, boost cash flow, protect you from debt and make it easier for you to accurately plan for the future. 

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Expert Market has specialist teams who have developed in-depth industry knowledge to help you find the best solution for your business.

Contact us to ask more questions and get specific advice on merchant accounts.

How much does invoice factoring cost?

Prices vary greatly but there are a few things to look out for, these include discount charges, credit management fees and credit protection charges. Discount charges can be significant depending on the type of service you employ. Monthly charges can be a daily rate of 1.5-3%. Credit management fees can be a fee of 0.5-2.5% of turnover for management and admin fees. The total figure is down to the volume of invoices, both discount charges and credit management fees can be negotiated for larger projects. 

Credit protection fees are only relevant for high-risk bad debts and isn’t usually more than 2% of the turnover.

Am I eligible for invoice factoring?

Not all businesses are eligible due to being considered high-risk. Invoice services usually require a minimum annual turnover of £50,000 but some companies will take on businesses that have a smaller turnover. 

Businesses that have a larger number of clients are seen as an advantage compared to those with a small amount. Some providers may also want some proof that the debts can be collected before they agree to take on a business. 

What are the benefits of invoice factoring?

Invoice factoring can revolutionise the way you carry out your business. With less stress and more cash flow, you have more options and opportunities to run your business the way you want to without being limited by a lack of funds. 

Here are some of the main benefits to invoice factoring:

  • Better cash flow
  • More free time 
  • Better planning ability
  • Protection from bad debt
  • Quicker customer payments