What makes a business suitable for factoring?
Criteria that make your business eligible 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 and will benefit most if it has:
- an annual turnover of 拢100,000, although some factors will consider 拢50,000 or less
- a good spread of customers - there may be funding restrictions if a single customer accounts for more than about a third of turnover
- simple, non-contractual debt that is easily proven
- low levels of debt more than 90 days overdue
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
- has complex contractual arrangements or warranty provisions
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