APT Initiatives
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Debt factoring

Involves a business selling its debts to another business (the factoring company) that specialises in collecting debts – often the subsidiaries of high street banks. Factors usually provide 75% to 85% of the value of payments due by customers instantly, and once all debts have been collected, retain up to 5% of the remaining 15-25% as a fee for its service. Debt factoring is particularly aimed at small to medium sized businesses and especially suitable for firms whose sales are rapidly expanding but whose credit control facilities have not developed at the same rate. Factors are more interested in well-established, expanding businesses rather than new or unusual businesses, as these are considered a greater risk. Firms with a large number of small customers or seasonal trading patterns are also less desirable.

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