Right, well, what I’d position it as, is some customers are just rubbish. You get that. It’s a taboo discussion, but it happens. Indeed, in the five years to 2010, the number of businesses experiening bad debt was 43% now it’s 77% in the 5 years from 2010 to 2015. It’s an increasing problem, and one that is not likely to go away or even materially improve by any recent changes in legislation. Whatever their spirit.
Debt factoring companies release a proportion of funds early. It can vary between 65% and 90% depending on the value of the invoice with the rest coming after payment. They take a fee and there’s a setup fee too with some providers.
There are several questions that you need to ask before using a financing company, including whether this is better than loans or overdrafts and in some cases the amount taken can be quite expensive. There is also how much money you want to be allowing on account in the first place.
Either way, it definitely releases money early. So they definitely have their place and one that is increasingly necessary in this day and age.