• About Us
• Meet The Team
• Factoring Services
• Insolvency Services
• CVA
• Pre Pack

Is Confidential Factoring Right for My Business?

Contact the UK’s Leading Experts in Business Recovery Today...

If your business is experiencing problems with cash flow largely due to uncollected invoices on your books, factoring could be a viable solution. However, there are certain things to be aware of before researching factoring companies because not all businesses qualify for this type of business solution. Usually, if your business is at least one year old and if the bulk of your outstanding invoices are from other businesses, you may very well qualify for factoring. Unfortunately, there seems to be some amount of confusion between confidential factoring and confidential discounting.

Comparison between Factoring and Confidential Discounting

Since so many business owners understand the concept of factoring it is likely they get confused with the ‘confidentiality’ issue. Technically, there is no such thing as confidential factoring because by its very nature, factoring is given over to a third party to collect those invoices for you. Confidential discounting on the other hand does provide for complete confidentiality as no one needs to know you took a loan on up to 80% of those accounts receivable. In both instances you are given a loan on invoices considered to be ‘good debt’ but the difference is that a factoring company collects debt that is factored and you retain control of your books in confidential discounting.

Key Points to Know about Factoring

As mentioned, factoring can be a great solution for a business with a solid history that is just experiencing some setbacks due to the inability to collect on outstanding invoices. Factoring is specifically intended for businesses that deal with other businesses so factoring wouldn’t be an option if your invoices were not business invoices. Furthermore, confidential factoring or more specifically, confidential discounting, means that the potential lender needs to know that those accounts are quiet likely to be paid. If not, the factoring company would probably do one of two things. They would either insist on traditional factoring where they collect the debts or they would refuse the loan. Confidential factoring or discounting is only an option when those accounts look solid enough that there will be no need for a third party to do the collections.

Therefore, confidential factoring and discounting is not the perfect solution for every business, but it is one that has been used successfully time and again to help businesses throughout the UK avoid insolvency. Companies like Real Business Recovery can handle your confidential factoring or broker a deal with a reputable factoring company by allowing you to compare rates and contractual conditions. The bottom line is, if you are having difficulty with day to day operating expenses because of outstanding invoices, confidential factoring or traditional factoring may be just what you need to stay in the black.

Find out more...