How Does Factoring Work
Step 1
You provide a service or deliver goods to your customers.
Step 2
You raise an invoice to those customers for the goods or service provided.
Step 3
You notify the invoices to the invoice factoring company.
Step 4
The invoice factoring company will advance up to 90% of invoice value to your business.
Step 5
The invoice factoring company will provide a credit control service. This can be designed to your requirements but will consist of telephone calls to debtors, letters and month end statements.
Step 6
When the invoice is paid by the customer, you will receive the balance of the invoice less a small charge from the invoice factoring company.
Still unsure on how factoring works? Try our glossary and see a full list of invoice finance terms.
