Don’t become a cash flow casualty

I can’t help but get frustrated after reading the last paragraph and article on www.bridgingandcommercial.co.uk about invoice factoring and discounting which is completely incorrect. The author of this article stated that the costs are 20% to use the product, this is such a gross over statement and the author obviously has no idea about how this type of financing works. Now if all he is doing (which he obviously is) is writing articles for the sake of advertising bridging finance then so be it…but if you are going to quote costs by putting your finger in the air and choosing a number to make “bridging finance” appear more attractive then all of his material should be taken with a grain of salt.

The costs of invoice factoring are greatly (GREATLY) less than 20% and if it was this expensive then it could never be called a “cash flow solution” as it would simply send businesses bankrupt in weeks! Factoring is used to help businesses grow and more often than not provide additional services such as outsourced accounts management, credit reporting and collections work. The author of this article should of thought it worth mentioning that bridging finance requires the use of property security whereas invoice factoring doesn’t require it…I am sure that’s a point of difference between the two.

See below some (just a few) of the frustrations that factoring can help with:

– No need to mortgage your home or business premises
– No lengthy application process and red tape
– No problem if you have past defaults or credit problems
– No need to apply for more money each time, money available grows as you grow
– No need to worry when cash will be available, as you invoice cash is advanced in 24 hours
– No need to worry about when your customers are going to pay
– No need to worry about the credit of your customers