Debt factoring and invoice discounting: the basics

Debt factoring and invoice discounting: the basics

What makes a business suitable for factoring?

Factors' requirements vary, so what follows is an indication and not a rigid list. You may find a factor even if the following criteria are not met.

What makes a business suitable for factoring?
Your business may be suitable for factoring if it has:

an annual turnover of at least £50,000, although some factors will consider start-ups and smaller businesses
more than just a few customers
no single customer accounts for more than about a third of turnover
customers that accept the standard payment terms for the industry
customers that accept a reasonable period of credit
What makes a business unsuitable for factoring?
Your business may not be suitable for factoring if it:

sells to the public - factoring is only available for sales to commercial customers
has too many small invoices
has too many disputes and queries
is not a sound, reputable and trustworthy business
has customers that make part payments or stage payments