A factoring company provides an alternative form of financing with immediate payment of your outstanding invoices. You sell the invoices to the factoring company and get the money in your account within 24 hours. Factoring companies charge a small fee for this. In doing so, you transfer the risk of the outstanding invoice, giving you security in terms of working capital. Your cash flow improves with this method of debtor financing.
Why choose a factoring company?
As a company, you have to deal with a payment term when you send invoices to debtors. This means that the outstanding amount is not immediately available to you. Moreover, you run the risk of a debtor not paying immediately.
It costs you time to maintain tight debtor management, and it happens that the invoice is not paid. If you pick a factoring company like Factris, you don’t have to worry about the invoice, and you get your money immediately. The factoring company then takes ownership of the invoice and collects the outstanding amount from the debtor.
Since you receive the payment within 24 hours, this will boost your working capital. The improved cash flow position can be used by you for investments and payments, among other things. Transferring your invoices to a factoring company also gives you security against non-payment and insolvency.
Different types of factoring companies
It is good to know that factoring comes in different forms. A traditional factoring company buys all invoices, and an American factoring company provides flexibility. In this case, you do not have to sell all your invoices but make a choice to do so.
There are additionally reverse factoring companies that assess the financial position of the debtor and only take over approved invoices. Factris is a factoring company where you will find optimum convenience and flexibility. With us, you may transfer all invoices or sell part of your invoices as you choose.
What are the costs with a factoring company?
A factoring company buys over invoices and pays them directly. For this, you pay a small fee. These factoring fees can amount to up to 3% of the total invoice value. We take several factors into account to calculate the cost of factoring.
The calculation is based on volume, and we look at the debtor’s risk. In doing so, we distinguish between initial amounts and additional amounts. The initial amount applies during the first 30 days, and the additional amount to the period thereafter.
How does the application process with a factoring company work?
Factoring companies have an application procedure for companies. At Factris, the application procedure is easy and quick to arrange. Several details are required, such as annual turnover and information about the average time in which your invoices are paid. You send these details to us online, and within five minutes, you get a personalised quote with an insight into the costs.
You will be assigned an account manager at our factoring company who will help you further. For example, also by looking at your business needs and by providing information on debtor management and credit management. Your personal account manager will also provide further guidance through the application process so that you can quickly enjoy all the benefits of selling your invoices. We set this personal approach apart, with our account manager assisting you with clear advice and answers to your questions at no extra cost.
Additional Benefits of Factoring with Factris
Beyond the expedited cash flow and risk transfer, Factris offers additional benefits. Our factoring services provide not just financial support but a strategic partnership. When you choose Factris, you benefit from a team of experts dedicated to understanding your business needs.
- Customized Solutions: We understand that every business is unique. Our factoring solutions are tailored to meet your specific requirements, ensuring a personalised and effective approach to financial management.
- Credit Protection: Worried about the creditworthiness of your debtors? Factris takes on the responsibility of assessing and managing debtor risks, offering you protection against non-payment and insolvency.
- Transparent Reporting: With Factris, you gain access to transparent and detailed reports on your factored invoices. Stay informed about the status of your transactions, enabling better financial planning and decision-making.
- No Hidden Costs: At Factris, we believe in transparency. There are no hidden costs or surprise charges. The fee structure is clear, and our account managers are here to provide any clarifications you may need.
In conclusion, factoring companies offer businesses a strategic financial tool to enhance cash flow, reduce risk, and maintain financial stability. The choice of a factoring company should align with the unique needs of the business, providing a tailored solution for effective invoice financing.