How Does Invoice Factoring Work?

Factoring finance is an alternative form of a cash flow secured against the invoices themselves, not against real estate. It is incredibly significant when you need quick finance to meet immediate obligations in your business such as wages or rent. Factoring cash flow finance for your business is flexible, manageable, and quickly accessible. Once the invoice advance is secured by your business, it is repaid by your customers to the factoring firm within the invoice terms you have set with them. 

HOW IT WORKS

* Your business delivers goods or services to your customers as usual and they confirm your invoices. 

* Due to the time it will take to receive payment from your customer, your company sends the invoices to an invoice factoring firm otherwise known as the factor.

* The invoice factoring firm verifies the invoices by contacting your customer and once the verification is satisfactory, your company receives an advance of the invoice amounts immediately. The amount you will receive will depend on your agreement with the invoice factoring company.

* The invoice factoring company then receives the invoice payment from your customer and deducts a fee for the factoring service it has offered you. The remainder is forwarded to your company as a rebate.

To find out how Nova Cash Flow Finance can help your business, contact us here.

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