Car12

Factoring/Invoice Discounting

Equilibrium Finance have established relationships with many factors and discounters. Once we understand what is important to you, we will introduce you to the ones that we feel best suit your type of business .

In summary –

Factoring
Factoring involves a business contracting out its sales ledger and debt collection to a specialist financial institution some of which are bank owned.

The factor will:

  • Pay the business for its invoices when issued.
  • Collect payments from its customers.
  • Pursue late payers.
  • Advise the business on the creditworthiness of its customers.
  • Administer the business’ sales ledger and credit management function.
  • Protect the client business against bad debts (if required).
  • Optional protection against bad debts, up to agreed credit.
  • Limits for each customer is also available.

Invoice Discounting
By contrast, under an Invoice Discounting service, you continue to administer the sales ledger and the service is usually undisclosed to customers. Invoice discounting involves a business exchanging its invoices for cash, but little else.

The business will:

  • Retain control of its sales ledger.
  • Send out its invoices under its own name.
  • Collect payments direct from its customers.
  • Deposit the payments with the bank as soon as they have been received from its customers.
  • In some cases have optional protection against bad debts, up to agreed credit limits for each customer.