Manufacturing factoring - cash before goods leave the floor
Thursday 23rd May 2024
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Cash flow challenge: I need to fund materials and labour costs now, but my customers won’t pay until production orders are complete.
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Perfect for: Manufacturing businesses that supply to wholesalers, retailers, or distributors on extended payment terms.
Novuna helps manufacturers release cash from unpaid invoices through factoring, either through our award winning in-house service or by comparing the market to find the best fit for your production needs.
We work with providers who understand the manufacturing sector, help you apply, and make sure you get the right deal to keep production on schedule.
How manufacturing factoring works
Manufacturing factoring allows you to sell your outstanding invoices to a factoring provider in exchange for a cash advance. The provider then collects payment from your customers directly, giving you quicker access to funds without adding debt to your balance sheet.
Benefits of factoring for manufacturing companies
- Cover material and production costs: Get the funds you need to pay suppliers and keep production schedules on track, even if customers delay payment.
- Improve cash flow stability: Accessing cash tied up in invoices means you can plan ahead and manage your working capital more effectively.
- Support for large orders: Take on bigger contracts without worrying about the cash flow gap between delivery and payment.
- Outsourced collections: Let the factoring provider handle payment collection, freeing up your team to focus on production and sales.
Things to consider before choosing manufacturing factoring
- The fees and percentage taken by the factoring provider
- Whether you require non-recourse factoring for protection against customer non-payment
- How the provider’s collections process aligns with your customer relationships
- Funding limits based on your typical invoice values and volumes
How Novuna Business Cash Flow can help
We’ve helped manufacturers across the UK unlock cash tied up in unpaid invoices to keep operations running and seize new opportunities. Our facilities are fast to set up, flexible in structure, and tailored to the needs of your manufacturing business.
