Welcome
To the blog for small and medium sized business (SME) owners.
A small business (SME) owner may provide the first funds for the business from his/her own resources, or support may be given by a financial institution perhaps in the form of a loan.
However, an expansion of the business may result in a requirement for more finance to support the business growth with the sums involved being larger and may be beyond the means of the business owner. A bank or other finance provider may require collateral alien to the business owner’s wishes.
What actions are available to the SME business owner in such circumstances?
Learn more on business funding for SME businesses.
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.
