How much of the invoice amount is advanced with commercial factoring?
The size of the advance rate of each invoice is subject to the initial agreement in the contract which will have been carefully analysed by the factor. The more secure the commercial factor is with the type of company you have as clients the more likely the factor is to increase the advance rate. For example if you work with FTSE 100 companies your advance rate will be closer to 100% than of your client base is made up of small companies with limited trading history. In addition to the type of client you have on your sales ledger the type of work which you are involved in is also a bog influencer of the size of the advance rate the factoring company is willing to give you. Industries such as construction frequently operate on contracts which are stage payment or application for payment. Historically these types of contract would have been rejected by commercial factoring companies but as the understanding of how to manage the collection of these debts and their nature increases, factor
