With the UK in the longest recession since records began and the worst since the Second World War, it’s fair to say that running a business is incredibly tough.

Now overlay that with the banking crisis and credit crunch and you have the perfect conditions for very restricted availability of business finance and thus working capital as overdrafts are often this first facility to get pulled by the banks.

Invoice Factoring can be the key here as the invoice factoring company will usually fund up to 90% of the sales invoice you have raised with your customer.

The accounting terminology for selling on credit is Accounts Receivable or Debtor Ledger which is a record that shows how much is owed to a company by customers who have purchased supplies or services on credit.

This sales ledger is an asset belonging to the business which can be used as a guarantee to raise finance against which is known as debt factoring. Sales Finance has been used now for may years and like most monetary instruments the USA pioneered its popularity.

The British Accounts Recievable market is now very strong with over 85 different invoice factoring companies.

Not every invoice factoring company will accept every industry sector; moreover every factoring company has their own individual and specific lending criteria.

A factoring broker will work with businesses to ensure that their specific business is understood and that a factoring solution is tailored to their individual needs. Furthermore factoring can be misunderstood and therefore miss-sold. It’s very important that your broker understands your business and your exact business and sales processes so that the exact solution is mapped out so that there are no nasty surprises.

Invoice Factoring will not turn a bad company into a good company, it will however, inject fast cash into a business selling on credit terms to its customers.

For more information on how Invoice Factoring could help your Company, please contact invoice finance team at Enable Finance Ltd. The national UK commercial finance broker.