Letter: Benefits of factoring to small firms

Sir: Francis Evans (Letters, 19 August) is wrong to suggest that the benefits of factoring are illusory. They are, in fact, entirely tangible - as the 10,000 small businesses in Britain using the service can attest.

First, debtors are settling invoices with factors in an average of 62 days, compared with a sectional average of more than 80 days when dealing with companies direct.

Second, factors advance up to 80 per cent of unpaid trade debts as soon as they are incurred - providing the small firm with the regular injections of cash that it needs to keep expanding safely.

Britain's small business community is suffering from late payments and the drought of new bank lending. It needs a fresh source of capital to tide it over the recession, and factoring is an attractive option. Now is not the time to cast aspersions about a service that is proving the lifeblood of many small businesses.

Yours faithfully,

BEN ALLEN

Association of British

Factors & Discounters

London, WC2

20 August