- FAQ's Introduction
- How does factoring differ from Invoice Discounting?
- What effect will using factoring have on my business?
- What effect will it have on my bank?
- Does it increase Administration?
- Will it work for my type of business?
- What happens if sales drop?
- What about a Seasonal business?
- Is there a minimum time I must contract to a funder?
- How much does it cost?
Invoice Financing/Factoring - How much does it cost?
Service fees for factoring are based on a percentage of sales but normally between 1% and 2.5% would be charged. Invoice discounting is much cheaper as the administration is handled by the customer. service fees are typically in the range of 0.2% - 0.6% on sales. By comparison bank borrowing is normally base rate plus a premium of anything between 1.5% - 4%.
