Factoring has come a long way since its introduction into the UK in the early 1960’s. Initially viewed with suspicion it’s now a widely used (nearly 50,000 businesses in the UK) and accepted means through which a business can generate working capital.
The word Factoring, whilst literally referring to the sale and purchase of an asset, in this case a businesses accounts receivable (debtors) at a discount, now encompasses some other facilities notably invoice discounting.
Key to Factoring is the finance it generates enabling a business to exist and grow, especially at a
time when traditional bank facilities are coming under so much scrutiny.
The mechanics behind factoring are fairly basic. If a business looks at how much it is owed by its business customers in total and works out 80% of this figure then in general terms that’s how much may be raised.
However, no two businesses are the same and no two factoring companies are the same either. As time has gone by the industry has acquired its own jargon which can be very confusing to a prospective buyer.
Just Factoring is a specialist, independent and importantly, experienced brokerage that helps businesses through the often complex process.