![]() ![]() The credit management fees for invoice discounting are typically lower then factoring because you retain the responsibility for collecting and managing your own debts, so there’s less work for the invoice finance provider to do. The provider may charge a monthly fee to cover the administration costs associated with delivering the facility. For that reason, it often represents better value to release funds from higher value invoices. Generally speaking, the higher the value of the invoice you want to release funds from, the lower the discount charge will be. This charge will be applied usually on a weekly or monthly basis and will typically range from 0.5 – 5 percent. It is the cost, calculated as a percentage of the invoice value, for releasing the cash to you. The discount charge works in the same way as bank interest, just like you’d pay on a bank loan, overdraft or business credit card. Re-Factoring Fee 1% against invoices outstanding after 90 days from month end Selective Credit Protection 0.7% of invoice total, if requiredĬoncentration Percentage 100% of Invoice Value of all outstanding Approved Debts subject to bad debt protection limits. Service Fee 1.3% of Invoice Value, subject to a monthly minimum fee of £550ĭiscount Fee 4% over the base rate on Funds in Use, subject to minimum base rate of 0.5% Initial Payments Percentage 75% of Approved Debts Factoring rates example based on a £600,000 Should your business be classed as a low risk by one of the credit agencies and submit a high volume of invoices to be factored, in theory a lower rate will be offered.
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