How Factoring your outstanding Invoices solves cash flow.

8th April 2020

Keep cash flowing and save yourself the stress of unpaid invoices with Factoring

During the Covid-19 lockdown it’s more important than ever before for you to keep your cash-flow intact and your invoices being paid. The UK government has announced a raft of loans, grants, tax relief and support to help businesses through the Covid-19 pandemic. But if you’re an SME or freelancer who has been able to continue working, the last thing you need is payment terms of 90 days or more.

You do all the work, send it in to your client with your invoice, and wait… then wait some more… and wait a little longer… before you get paid. And all the while, you’re still having to cover your mortgage, rent, bills, as well as put food on the table – if there’s any in the supermarket, of course!

And that is where invoice factoring can help. You effectively sell on your invoice to another company, who will then (according to their terms) pay you the amount owing. They then wait out the terms of the original invoice, which means your cash flow is unaffected, and you can carry on working without the worry and stress of waiting for invoices to be paid. Sounds great, doesn’t it?

HardSoft can organise Factoring for your Business

We specialise in leasing computers to small businesses, and we believe that by offering factoring, we are helping to fully support our customers. Many of HardSoft’s customers are small creative industries companies who often find that when they land a big-name client, the long delays they face before receiving payment for the work they have done, as long as 3 months in some cases, can cause them untold stress and financial difficulties. Something they often wonder if the kudos of working with those household names is worthwhile. We understand how hard this can make the day-to-day running of a business, and so we’ve partnered with one of our leasing companies in the hope of making our customer’s lives a little less stressful.

How does Factoring work?

When you ask us to Factor invoices for you, we will seek credit approval on your Customer. Once they have approved, which is normally within 24 hours you receive a cash advance on the invoice which is usually 90% of the total amount owing. Contact is then made to contact your Customer involved that they are Factoring the invoices on your behalf and wait for payment. Once payment has been received in full, you then receive the final 10% (less the factoring fee, which is generally in the region of 2.5%). These Factoring charges are extremely competitive, as well as being completely transparent – nothing nasty hidden to discover later! – and there is a 3-month trial available, so that you can decide whether it works for you.

When you factor invoices in this way, it allows you to give more favourable terms to your clients, meaning that you increase your chances of renewed or additional orders, and in turn, improve your turnover.

Multiple or Single Invoice Factoring

Choose if you wish to ‘sell’ multiple invoices of your choice, every invoice over a set time period or sell invoices on an ad-hoc basis. You could also group together several invoices e.g. if you have five invoices totalling around £10k, you can bundle these together and sell them on for factoring. 

Factoring allows you to feel more secure about your income and be confident that your cash flow will no longer fluctuate so much that it causes you sleepless nights!

To find out more about invoice factoring and how we can help, call us on 020 7111 1643 or email info@hardsoft.co.uk.