Contractor Finance – factoring for Contractors
Contractor Weekly have partnered with Contractor Finance, the UK’s only provider of factoring for contractors.
Factoring, a product widely used by SMEs is a way in which businesses improve their cash-flow by accessing cash tied up in their invoices, enabling them to pay suppliers on time even if clients haven’t paid them. Up until now this type of business finance has never been made available to contractors due to the banks lack of understanding of their business status and pigeon holing them as sole traders. Our partner, Contractor Finance, has redressed the balance and taken it one step further – all Contractor Finance clients get cash with every approved timesheet. This bespoke product has been designed to alleviate the cash-flow problems that contractors face, MD Joanna Holloway explains ‘a traditional factoring product wouldn’t necessarily assist a contractor at the outset, as they still would still have to wait for their first invoice to be raised before they could take advantage of the cash we can give them. We wanted to design a product that really helped so we offer finance on approved timesheets instead – that way anybody, including people new to the game, can have cash in the bank after their first week of being in contract’.
For contractors who have just made the jump from PAYE, or have a short-term cash-flow requirement, this can be the ideal way to bridge the gap between when the contracted work has been undertaken and receiving payment from your agency or client.
Despite the bad press surrounding the costs of factoring, in reality you’re likely to pay less than 2.4% per invoice for the full service.
How does it work?
It’s simple – you e-mail your approved timesheet to Contractor Finance every week and receive 80% of its value into your business bank account. Your contract determines the frequency of timesheet and invoice; Contractor Finance will issue an invoice on your behalf to keep in line with your agreed terms and then follow up with collections until the invoice is paid. Once the invoice is paid the balancing 20% (minus fees) is sent to your account.
How much could you get?
The calculation is simple – multiply your day rate by 40 and that’s how much you could have access to on day one! Give Contractor Finance a call, or use our Quick Quote, to find our exactly how much YOU could get!