FaCTS ALCHEMY

Empowering Working Capital

What is Asset Based Lending and how does it work?

Factoring and Discounting

Are services that provide increased working capital to growing companies by purchasing their sales invoices as soon as they are raised.

The factor will normally pay out around 80% of the invoice value immediately, and the balance once the debt is paid

The charges for this service are a 'Factoring or Service fee' and a cost of money 'Discounting Fee'.

If the funding released can be effectively utilised in your business the costs can easily be covered by increased profitability.

The factor will also carry out the credit control service, liaising closely with you as to the best collections approach

Discounting is similar to factoring, the main differences being, you handle your own credit control and the arrangement is often confidential (i.e.. your debtors don't know of the involvement of a factor.

Asset Based Lending

As a generic term this encapsulates factoring and discounting but offers a range of other, more specialised financial services, such as stock finance, floor planning for capital goods, transactional finance and trade finance (both products supporting the purchase of goods.

Comments

The UK's market for these services is becoming increasingly complex with many players offering a wide range of what can sometimes be confusing products.

The market for factoring and discounting alone now handles in excess of £160 billion of invoices for some 50,000 companies.

It is expected that factoring and discounting will replace the old fashioned, inflexible overdraft within the next 2 to 5 years as the way for all SME's to raise working capital finance..

FACTS Alchemy can guide you to the perfect partnership.