The Complete Guide to Invoice Factoring - Tapton Capital
One of the biggest challenges facing UK businesses is managing cash flow. Even profitable companies can be strained by late payments, long credit terms, and tight margins. Unpaid invoices can be quickly converted into working capital by invoice factoring.
By connecting UK businesses with market-leading factoring solutions, Tapton Capital gives you access to funds when you need them, without increasing your debt.
What Is Invoice Factoring?
Using invoice factoring, a business can sell its outstanding invoices to a factoring company for immediate cash. By unlocking 90% of an invoice's value within 24–48 hours, you don't need to wait 30–90 days for your customers to pay.
Factoring companies collect payments directly from your customers, deduct a fee, and release the remainder. Business owners can stabilise cash flow, pay suppliers on time, and fund growth without taking on traditional loans.
How Invoice Factoring Works
It is a simple and transparent process:
1Issue Invoices
Delivering goods or services to clients and issuing invoices on credit.
2Submit to the Factor
A factoring company buys those invoices.
3Receive Advance
Tapton Capital can advance up to 90% of the invoice value as an immediate cash advance.
4Debt Collection
Your factor manages credit control and collects payments.
5Balance Settlement
You receive the remaining balance (minus fees) after your customer pays.
Creating a continuous funding cycle allows your cash flow to grow with sales.
Types of Invoice Factoring
1. Recourse Factoring
If your customer fails to pay, you remain responsible. For businesses with reliable customers, it offers lower fees.
2. Non-Recourse Factoring
Factoring providers assume credit risk. Bad debts are protected, but at a higher cost.
3. Selective or Spot Factoring
If your business is project-based or seasonal, factoring may be the ideal solution for you.
4. Whole-Ledger Factoring
Factoring ensures a steady cash flow and comprehensive credit management.
Key Benefits of Invoice Factoring
1. Immediate Cash Flow
Your invoice value can be paid to your staff, suppliers, or operations within 24–48 hours.
2. No Additional Debt
In factoring, receivables are converted into cash – they don't appear on your balance sheet as liabilities.
3. Outsourced Credit Control
By partnering with a factoring company, you save time and improve collection efficiency by managing customer payments.
4. Scalable Funding
Increasing your invoice volume increases your working capital availability.
5. Credit Protection (Optional)
With Tapton Capital, you are protected from customer insolvency through non-recourse factoring.
Who Can Benefit from Invoice Factoring?
B2B companies with credit terms benefit from invoice factoring. Among the industries that often benefit are:
Construction & Engineering
Bridge cash flow between milestones.
Manufacturing & Distribution
Pay for materials while awaiting client payments.
Staffing & Recruitment Agencies
Contractors are paid weekly, while clients are paid monthly.
Professional Services
Ensure salary and operation liquidity.
Factoring can provide stability and agility to any growing business experiencing cash-flow gaps due to long payment terms.
Costs & Considerations
Invoice costs typically range between 0.75 and 2.5%. It depends on:
- Value and volume of invoices.
- A customer's creditworthiness.
- Sector risk and payment terms.
There are no hidden fees or long-term lock-ins at Tapton Capital. Every provider's terms are reviewed, and we compare the rates, quality of service, and suitability before recommending one.
Why Choose Tapton Capital?
Our goal is to be your finance partner, not just your broker. We:
- Find the most competitive factoring partner on the UK market.
- From application to completion, handle the process.
- Provide guidance on recourse vs. non-recourse factoring.
- Establish transparent pricing and tailor-made agreements.
Rather than taking on unnecessary debt, we aim to help your business grow sustainably.
Ready to Transform Your Cash Flow?
Convert your unpaid invoices into immediate working capital with Tapton Capital's invoice factoring solutions.
Get Free ConsultationConclusion
Factoring is more than a financing tool. It enables growth. Working capital can be converted into immediate working capital, credit control improved, and expansion funded with confidence by partnering with Tapton Capital.
Tapton Capital: helping businesses fuel sustainable growth by bridging cash-flow gaps.