Factoring invoice ledgers is an excellent way to unlock the tied cash your company possess in it's unpaid invoices. Unlocking your cashflow in this manner leaves you in a healthier financial position to take advantage of opportunities arising allowing you to take your company to the next level.

If you are interested in factoring invoice ledgers then click here to get an invoice factoring quote with Alex Lawrie Factors.

How does invoice factoring work?

Factoring works as follows: The factor fully manages your sales ledger and provides you with credit control and collection services of all your outstanding debts. The invoices you issue upon a sale are sent to the factor who typically advances up to 80 to 90% of the invoice amount to you. The balance, less charges, is paid when the customer makes payment directly to the factor. The service is disclosed to your customer who typically receives a letter from the factor, or attached note to your invoice, containing payment instructions to the factor.

Funds are typically released to you within 24 hours of issuing the invoice.

There are typically two costs involved: a service charge expressed as a percentage of sales factored and an interest charge for the cash advances. The service charge, covering sales ledger management, collections services and, if you wish, bad debt protection can range between 0.60% and 3.0% of turnover. The main considerations in determining the service charge are your annual turnover, number of invoices and number of customers. The interest charges calculated on the daily usage of funds is typically comparable to normal secured bank overdraft rates.

The advantages of invoice factoring

• Funding is flexible and linked to your current, and future trading levels and needs. This is in contrast to traditional finance, which is based on historical balance sheet ratios.You can plan ahead more confidently, because you know that a fixed percentage of monies invoiced out will actually be available at any given time.


• Extra up-front finance gives you extra bargaining power in dealing with suppliers. You can take advantage, for example, of bulk purchase, or prompt payment discounts.


• Access to credit ratings allows confident trading with new enquirers, ensuring that your hard work attracting customers is not wasted through bad debts.


• Professional credit control gives speedier cash flow, providing freedom to grasp business opportunities.


• Expert help can be extended when expanding into overseas markets, giving you the peace of mind despite the physical distance.

Lloyds TSB Commercial Finance: the UK's largest invoice factoring company

Established in 1962, we are pleased to say that we’ve grown to be the UK’s leading factoring company. Not only are we independently managed, with the largest network of client services offices in our industry (which means personal service is always at hand), you also have the security of knowing we are a wholly owned subsidiary of Lloyds TSB Group PLC.

In fact, so confident are we of the quality of our service, that we’re prepared to offer you a guarantee. If after 6 months you are not satisfied, we will refund any service fees you have paid during that time! Use our iQ (Instant Quote) service to receive a tailored quotation based on your business's projected activity.