When can I expect a policy to be effective?
With your input a policy can be in force in as short a time as seven days. This process is quicker if you provide pertinent information right away.
What are benefits of invoice factoring over a bank loan or overdraft?
When there is a possibility of using a bank loan or overdraft why should I use invoice factoring? This service can develop with your business, and you won’t run the risk of having hidden costs with an invoice factoring service as the terms are provided upfront.
Can invoice factoring cost more than invoice discounting?
If you use invoice discounting your employees take care of your credit control. While it can be more cost effective to do so, you may not want to give this kind of control to your employees. An invoice factoring service deals with your creditors which can be a better source to ensure success.
How long will the contract last?
The answer to this question generally depends on the invoice factoring provider you choose. There should be a clear cut timeframe explained before any contract is signed. Be sure to see if there are any penalties for ending the contract early.
Can there be problems if you want to end the invoice factoring agreement?
This will depend on which provider you sign with but three months notice isn’t unreasonable. When you are questioning providers be sure that this is one of the questions you ask.
How much profit will your business need before needing invoice finance?
While some invoice factoring providers will help start up businesses others may want to see annual profits of £50,000 before they will sign you on as a client.
If I am a sole trader can I get a provider?
Generally there is not a problem with sole traders finding an invoice finance provider.
Will the amount taken by the invoice provider hurt my growth long term?
Since you are usually paid at least 85% of the invoice upfront and the provider only gets a small percentage out of the remaining 15% there should be no damage to your business growth.
Is it possible to have more than one invoice finance provider concurrently?
This isn’t something that is done and only rarely can it happen. With this is mind it is very important for you to make the right choice in invoice finance providers before you sign a contract. Comparison tools like Track Compare can be a great help in making a decision.