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  • Writer's pictureNeil Smith

What is invoice factoring and why its good for your cashflow

Invoice factoring is type of invoice finance where you "sell" some or all of your company's outstanding invoices to a third party as a way of improving your cash flow and revenue stability. A factoring company will pay you most of the invoiced amount immediately, then collect payment directly from your customers and charge a fee to your business. It is often cheaper and easier to obtain than a bank loan. While there are fees associated with invoice factoring, they may be less than the cost of paying dedicated credit control staff.

When should your company use invoice factoring?

Your company should use invoice factoring when you routinely have a lot of invoices outstanding and your cash flow is suffering because of it.

You can use the cashflow released to

  • Bridge short-term expenses and invest in new tools of your trade

  • Repay a loan

  • Take advantage of seasonal or upcoming business opportunities

Thus improving businesss stability with a predictable cashflow in place

Invoice factoring isn't suitable for companies with only a handful of main customers.

There are pros and cons for invoice factoring for different types of businesses.

I have access to over 90 funders, so you can be confident I will be able to meet a broad range of your needs. And as an appointed representative of AFS Compliance Ltd , you can have peace of mind you are operating in a fully compliant way. Please get in touch for a non obligation chat through of options to suit your business needs.

Impact Commercial Finance is an independent Asset finance broker not a lender, as such we can introduce you to a wide range of finance providers depending on your requirements and circumstances. We are not independent financial advisors and so are unable to provide you with independent financial advice. Impact Commercial Finance will receive payment(s) or other benefit from the finance provider if you decide to enter into an agreement with them. Impact Commercial Finance is an appointed representative of AFS Compliance Ltd which is authorised and regulated by the Financial Conduct Authority under number 625035.


Impact Commercial Finance aims to provide our customers with the highest standards of service. If our service fails to meet your requirements and you would like to report a complaint; please click on the link below;

Impact Commercial Finance Ltd is an Appointed Representative of AFS Compliance Limited which is Authorised and Regulated by the Financial Conduct Authority No. 625035

Impact Commercial Finance Ltd is a Franchisee of Asset Finance Solutions (UK) Ltd

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