Calverton Factors Home Page Invoice Factoring Invoice Discounting Fast Cash Business Support Services Recruitment Invoice Finance, Solicitors Invoice Funding, Invoice Finance for Printers, Bodyshop Invoice Finance Get A Quote Already a Calverton Factors Client Contact Calverton Factors Invoice Factoring Frequently Asked Questions (FAQs)
FACTORING INVOICE DISCOUNTING FASTCASH Calverton Business Support
Invoice Discounting
  1. With Invoice Discounting you will receive advances of funds against outstanding sales invoices.
  2. You do the credit control and collect the payments from your customers.
  3. Your customers do not usually know about the invoice discounting, although it is sometimes disclosed.
How it works:
  1. You raise and issue your invoices and send (or download) copies to us.
  2. We make available to you an agreed percentage of the invoice value (up to 80%).
  3. You let us know how much you wish to draw down (up to the 80%).
  4. You chase the customers and collect payments (you pay these into our bank account ).
  5. Once payment has been received then we then pay you the balance.
Charges:
  1. Administration Fee: Charged as a percentage of the value of the invoice - normally from 0.5% to 1%.
  2. Discount charge: Charged against the funds that you draw down from your funding availability – normally 2.5% over bank base rate.
Comparison of Factoring. Invoice Discounting, and Overdraft
Factoring Invoice DiscountingOverdraft
What you get Up to 85% of the value of your outstanding invoices

Full Credit Control Facility

Cash Collection and Banking

Up to 75% of the value of your outstanding invoices Normally around 50% of the debtors (outstanding invoices) unless other security e.g. property is available
Advantages Generous levels of funding.
Secured principally against your debtors i.e. no other security required.

Facility linked to sales growth – no need for constant renegotiations

You manage your own credit control

Facility can be confidential

Simple and easy to administrate
Disadvantages You may not want to give up your credit control.

Your customers will know that you are factoring.

You are still paying an administration fee but do not get the same level of service as you do with factoring. Facility is ‘On demand’ which means it is constantly reviewable and can be pulled at the bank's discretion.

Line increases need to be renegotiated.

Not as ‘generous’ as factoring or invoice discounting.

Charges over personal assets (house) may be required

Good for New start and young businesses.

Businesses where credit control is time-consuming.

Businesses that cannot afford a credit control department.

Established but fast growing businesses with ongoing working capital requirements. Short term low-level funding requirements or seasonal requirements
Criteria ‘Factorable’ invoices i.e. for goods or services that can be verified as being delivered.

Note that you can factor a single well-rated customer or a spread of poorly rated customers.

Established business (3 years trading)

Proven Profit history

Sales in excess of £500,000

Efficient credit control operation

Depends on the nature of your business, the level required, the security available, the bank, the bank manager, the wind direction…
Costs
  1. 0.5% to 3.0% of the invoice value.
  2. 2.5% over bank base rate for any borrowings.
  1. 0.5% t0 1.0% of the invoice value.
  2. 2.5% over bank base rate for any borrowings.
  1. Monthly admin fee
  2. 1.5% to 5% over bank base rate for any borrowings
  3. May be other fees -particularly for unauthorised borrowing
If you would like a detailed quotation then please complete our “Get a Quote” page
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Calverton Factors Limited,
Calverton House, 1 Keller Close, Kiln Farm,
Milton Keynes, MK11 3LL UK
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