First Factor

Who can apply for Invoice Finance ?

Any business (Ltd co., Partnership, Sole Trader etc.) who sells to other businesses on trade terms. (back to FAQ’s)

Are Factoring Companies restrictive as to which industries they will finance ?

Undoubtedly Factoring Companies are ideally looking for straight forward sales transactions whereby the ultimate payment of the debt is not dependent on the fulfilment of a variety of contract clauses. For this reason they tend to shy away generally from the Construction Industry but increasingly Providers are becoming more “broad minded” regarding where they can give assistance.

Are my customers aware that I am using Invoice Finance ?

With Factoring - yes. Your Invoices will state that the debt is assigned to the Factoring Company who will make direct contact with your customer if any chasing of the debt is required.

With Invoice Discounting - no. The facility is entirely confidential and you retain the responsibility of managing collections from your customers. (back to FAQ’s)

How much will be advanced ?

Typically 85% of the invoice values will be advanced within 24 hours. However, the percentage figure could be less than this or possibly a bit more, up to 90%, depending on the quality of your debtor book and the nature and complexity of the sales transaction. (back to FAQ’s)

Will it affect my customers ?

With factoring possibly in a positive way. The Factoring Company will be taking over the sometimes difficult area of collections meaning that your relationship with your customer will be based more around the more positive issue of further sales. (back to FAQ’s)

How long do I have to sign up for ?

This varies but most providers require a 12 month sign up period with a further notice period of 3 months.(back to FAQ’s)

Can I protect against bad debts via Invoice Finance ?

Yes, virtually all Factoring Companies offer Credit Protection in one form or another. This may be built into the facility or provided on a stand alone basis. In some instances the protection will cover the whole debtor book whilst other providers offer cover against a selection of customers which you would specify. (back to FAQ’s)

What security do I need to provide ?

A charge over your book debts would be essential. In addition it is fairly common for the providers to require some kind of Indemnity or Fraud Warranty from the Co. Directors particularly with Invoice Discounting facilities. (back to FAQ’s)

How do I manage my Invoice Finance facility ?

With the vast majority of Factoring companies the facility is internet based. Reporting of new invoices would be done on-line and you would be able to see the amount of funds available to you and drawdown to your bank account as required. (back to FAQ’s)

Will I have a dedicated point of contact for my facility?

Yes. Most providers will actually provide two dedicated points of contact. The first would be your relationship manager who would have overall responsibly for all aspects of the facility and the ongoing relationship with your business. The second would be a Credit Controller who would liaise with you regarding specific issues regarding you debtor book and in the case of Factoring facilities, be responsible for chasing payment from your customers. (back to FAQ’s)