Factoring Construction Information
The Construction Industry is now able to raise invoice finance by using factoring from one of a small number of factors that handle the sector. Construction finance can improve your cash flow by releasing up to 70% of the value of your outstanding sales invoices (accounts receivable) within 48 hours. The remaining 30% is paid to you, less charges, once the payment is received from your customer.
How Construction Factoring Works
The factors that provide this service have their own Quantity Surveyors (QS) that are specialists in both the construction sector and factoring. They are able to structure the facility to meet your cash flow requirements and they can account for issues such as applications for payments, JCT contracts, liquidated damages, retentions and stage payments.
Factoring is explained in detail below with further information and resources such as case studies and articles that explain the benefits and how to compare quotations and prices. To request a no obligation UK wide search for quotations follow this link:
REQUEST FREE FACTORING QUOTATION SEARCH
About Cashflow Acceleration Ltd
Cashflow Acceleration Limited offer a UK wide free, independent quotation search service for factoring. In many cases we have saved clients at least 33% of the cost of their existing or quoted factoring facility and we can help you find a cost effective facility that will meet your requirements for service quality.
Factoring Information
Debtor factoring (sometimes called debt factoring) is a financial product (or facility) and a form of invoice finance. It is a working capital solution whereby a factoring company (also known as a factor) will provide you, their client within construction, with up to 70% of the value of your outstanding sales invoices (also known as accounts receivables, or your sales ledger) e.g. with outstanding unpaid sales invoices of £120,000 an early payment of 70% could release an initial cash injection of over £80,000. Payments can also be made against applications for payment which are common within construction. This releases working capital that will improve the cash flow of your business enabling you to pay creditors and use that cash for expansion and growth. In some cases overpayments in excess of that value can be provided.
The factor will then continue to provide you with 70% of the value of new sales invoices. The other 30% of the value of your sales invoices is passed onto you when the customer (also known as a debtor) pays.
In addition, the factoring company can undertake the task of chasing and collecting your outstanding unpaid debtor sales invoices, saving you time and money. The factoring company will send out debtor statements, chasing letters (also known as dunning letters) and will also contact debtors by telephone. Factoring companies are experts in this area and so they are likely to be able to improve the speed at which your sales invoices are paid through effective collections techniques, further improving your cash flow.
Bad Debt Protection
If you are concerned about bad debts, Cashflow Acceleration can introduce you to a factor or factors that will also provide you with up to 90% (of invoice value net of VAT) bad debt protection .
Help With Further Resources:
For information about the cost of factoring please click the link below or contact us for specific quotations and advice. Also shown below are some articles and a construction factoring case study:
Case Study - Construction Industry Factoring
