What is Factoring?
Have you ever been thrilled to land a contract or project with a really big household name company, only to panic when you find out their payment terms are usually 90 days? So, you do the work for them, send in your invoice and then have to wait… and wait… and wait… to be paid. All whilst you’re still having to pay your bills and mortgage, and put food on the table! Well, that’s where invoice factoring comes in. You sell on your invoice to another company, who then pay you – depending on their terms – and wait for the client to pay them, meaning your precious cash flow is intact and you can continue working without gaining any grey hairs from the stress of waiting. Sound good? Well, we can now help you with this.
How HardSoft can help
Hardsoft specialises in leasing computers to small businesses and factoring is a logical extension to this service. Many HardSoft clients are small creative businesses who find that, despite the kudos of working with big named clients, it can cause them real headaches when they face long delays before being paid for work they have done, sometimes as long as 3 months ago. We know how had this can make day to day business for our customers, so we’re partnering with one of our leasing companies, Grenke, who also offer to factor, in a bid to help make our customer’s lives easier. And as we all know the option to phone the bank and get an instant overdraft just doesn’t exist anymore.
Factoring Classic is a whole turnover product where the customer ‘sells’ us all of their invoices, Factoring Choice is when a customer only factors in selected invoices. We also have our single invoice product, where clients can sell invoices on an ad-hoc basis – you could even group together several invoices e.g. if you have five invoices of around £2k which means you’re waiting on payment of in the region of £10k, you can bundle them together and sell them on via factoring. Once you have asked us to factor invoices for you and Grenke has approved, you will receive a cash advance (usually 90% of the total), they will then inform the company that they are factoring the invoice on your behalf and wait for payment from them. When the payment has been made in full, you will receive the remaining 10%, less the factoring fee (usually in the region of 2.5%). The charges are transparent and very very competitive and you can have a three-month trial to decide whether factoring works for you.
Factoring invoices in this way allow you to offer more favourable terms to clients, which in turn can help you to gain increased orders from those clients and improve your turnover. As mentioned above, you can factor one-off invoices or big projects, as well as ongoing projects, or all of your invoicing altogether. Allowing you to relax about your income and feel confident that your cash flow will no longer fluctuate to such an extent that it causes you to lose sleep!
If you’d like to know more about how we can help you with invoice factoring, give us a call on 020 7111 1643 or email firstname.lastname@example.org