web statswebsite tracking software How Factoring Can Improve Your Business Credit Rating

Over 17 Years in Business

Recent Transactions

£100,000

To Small Van Courier providing deliveries in Ireland.

£250,000

To Small fashion importer and exporter

Companies that are struggling to maintain a positive business credit rating may consider factoring receivables to increase their credit rating and boost their chances of long term success. While many companies fail to realise the potential of receivables, tapping into the financial resources that are represented by accounts receivable can be the push a company needs to secure financing and move ahead.

Factoring allows a company to convert accounts receivable that will be realised as income in the future into cash flow that can be used in the business immediately. A bank or other financing institution buys the receivables and pays cash to your business so the company does not have to wait until the invoice is due to gain access to the money. Factoring receivables can be especially helpful for a company that extends lengthy due dates to customers and has a long wait before the cash flow is realised. Instead of waiting months for cash payments, a company that factors their receivables can have cash within a few days.

How can the factoring process help a company improve their credit rating? The credit rating of a company is largely determined by the current financial obligations of the company. Too many financial obligations or a high balance of money owed to vendors will bring down the credit rating of the company. Obtaining cash within a few days instead of a few months by factoring receivables means that a company will be able to pay debts sooner and keep balances under control. A higher credit rating means that the company has a higher chance of long term success through an increased confidence in investors and lenders.

Some companies may be unsure if they will be able to factor their receivables because of an uncertain cash flow associated with these receivables. However, the fact that existing receivables are used in the process of factoring means that any company with verified receivables will be able to benefit from this financing option.

A business that factors as a means to increase the cash flow of the business will enjoy the benefits of tapping into resources found in the company without increasing the total amount of debt of the company. Any business that has worried about the ability to fulfill financial obligations while continuing to make sales on credit and accruing accounts receivable should consider using this option to improve the overall financial health of the company.

Invoice Discounting Rates Starting at 1.59% to 3.5%

  • No monthly requirements.
  • No financials needed.
  • No setup fees