Karan Bilimoria, the founder of Cobra Beer, is a cheerleader for factoring, which he says is ideal for an ambitious small business unable or unwilling to tap into more mainstream sources. “It is a grossly under-utilised route which more companies should consider,” he says.
Gradually, factoring is starting to shake off its image as the last-ditch solution for companies close to breaking point. More than 33,000 small- and medium-sized-businesses (SMEs) used it last year.
Bilimoria turned to factoring seven years ago as a way to boost growth without handing over a hefty chunk of shares to venture capitalists or business angels. He still uses the service today.
Figures from the Factors and Discounters Association (FDA) show that the total value of invoices assigned to factors in 2002 was Ј118 billion compared to Ј15 billion in 1992.
