Invoice factoring is unlike many forms of business funding. It works on the simple process of the sale of your business invoices. This means you can actually finance your business by selling your unpaid invoices to a factoring company.
Factoring companies purchase your invoices, and pay you in two instalments. The first one when you initially sell the invoices and the second when the customer/client settles their bill.
The process of invoice factoring.
You provide your client/customer with a service or product
The client is presented with an invoice
This invoice is sold to a factoring company.
You receive an initial payment from the factoring company.
The client/customer settles their bill with the factoring company.
You receive your second and final payment from the factoring company.
As you can see, by simply selling your invoices you will provide your business with instant funding. These funds can be used to run or grow your business. Invoice factoring can be set up in only a few days; this is seen as a much simpler process than applying for a business loan.
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Peter Arkwright recently retired from the military; he is now the Managing Director of Bizseller4u Ltd - Providing business solutions in sales, advertising, funding, debt collection and recovery plans
Tags: finance., invoice factoring
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