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Factoring Services FAQs
Frequently asked questions
Hopefully, most of your questions will have been answered
in the buying guide, but if not, here are a few more common
questions that are often asked about invoice factoring:
What does it cost?
Service charge of 0.6% to 3.0% of
sales factored and an interest charge for the cash advances
calculated comparable to normal secured bank overdraft rates.
When do I receive the cash advances from the factor?
Typically
within 24 hours.
How much of the invoice amount is advanced?
Typically
80 to 90% of the invoice amount.
What is the difference between factoring and invoice discounting?
Both provide immediate cash with the issuance of invoices.
Factoring includes a full sales ledger service management
and debt collection service that is disclosed to the customer.
In invoice discounting the sales ledger management - the collection
responsibility - remains with you. The service is undisclosed
to the customer.
What is the difference between recourse and non-recourse
financing?
Recourse factoring excludes bad debt protection. In the case
of non-recourse factoring, if the customer fails to pay the
invoice, the factor will pay you. What is invoice finance?
Another phrase for factoring and invoice discounting.
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