To the blog for small and medium sized business (SME) owners.

Friday, September 28, 2007

Invoice Discounting and Factoring

What is Factoring and Invoice Discounting?

Factoring and invoice discounting enables the business owner to raise finance for the business. This is done through the borrowing of monies against the sales invoices raised that will be settled by the customer after an agreed period of credit.

A significant advantage is that the amount 'borrowed' at any time is in direct relation to the growth of the business. The higher the turnover the greater the sum available through factoring.

The sum 'borrowed' will be repaid to the factoring company out of the monies received when the customer settles the account.

This arrangement may be advantageous to business because it may eliminate the need to seek overdraft extentions to support ongoing business growth.

Learn more on factoring and other forms of funding.

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