Invoice Finance - busting myths

Busting Invoice Factoring Myths

Posted: 5th September 2017

Everyone loves a myth. From the Ancient Greeks to today’s modern world we are inundated with myths and legends.

That’s all well and good, but not what you want when it comes to financing your business.

So here we are, to settle once and for all, the myths surrounding invoice factoring.

Myth: Just for flagging businesses?

Thriving businesses choose invoice factoring to maintain their cash flow. It’s a sensible finance facility that means businesses get paid, within 24hrs, on issued invoices.

Myth: Buried in hidden charges

Here at Calverton Finance, our range of invoice factoring options are completely transparent, with no hidden charges or additional fees.

Myth: Expensive?

A small fee (and at Calverton we have market-leading competitive rates) is charged on the invoice factoring you choose. This is normally in the form of a percentage of the invoice total you put through the facility.

Myth: My customers will be harassed?

Our team at Calverton Finance use the utmost discretion and courtesy when calling your customers to chase payment. We consider ourselves an extension to your credit control department, and appreciate that any heavy demands on your customers would have a detrimental effect on your business.

Myth: I have to disclose I’m using invoice factoring to my customers

No, you don’t have to disclose our financial arrangements. If you don’t want your customers to know of our involvement, then simply opt for invoice discounting. This service offers the exact same benefits as invoice factoring but our involvement is totally confidential, with your customer paying into a personalised trust account.

Myth: All my invoices need factoring

Not true. Many businesses are subject to seasonal peaks and troughs and therefore do not need a factoring facility all year long. This is when the selective invoice factoring service from Calverton Finance is the ideal choice. You choose which invoices you put through the facility, advancing 90% of their worth. Businesses use this facility to see them through seasonal lows, using it only when they need it.

Myth: I’ll get locked into a long term contract

Your invoice factoring contract will be tailored to best suit your needs. Here at Calverton we don’t operate a ‘one size fits all’ mentality. Instead we look carefully at what will best suit your business.

Myth: Factoring companies will interfere with my business

We don’t interfere in the day to day running of your business, nor do we get in the way of your logistics and operations. You’re the expert at what you do, and we in our field. We simply want to provide you with a constant cash flow. This enables your business to grow and as such helps our business too. It’s a win, win for both of us.

Myth: Factoring companies will only deal with larger, established companies

At Calverton we specialise in SME invoice factoring, whether those businesses are established or new start ups. In fact, we’ve even won an award, being named as the ‘Best Smaller Invoice Financier 2017’ by Business Money magazine for our SME services.

We appreciate that start up businesses struggle to manage cash flow in the first few years of operation, especially when slow paying customers regularly exceed 60+ day payment terms. And that problem isn’t unique to start ups; even established businesses need an injection of cash to manage working capital and accommodate seasonal ups and downs. Invoice factoring, paying 90% of each invoice value within 24hrs, helps all businesses handle overheads, growth and fluid cash flow.  

 

Image courtesy of Warpaintcobra at FreeDigitalPhotos.net