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Factoring Companies in the North East include the invoice finance arms of the major banks but also there are a number of independent factoring companies with local offices.

Some actually have operational offices in the North East while others simply employ sales people who are based in the region. In all fairness if you have a business in the North East of England most factoring companies within the UK will be able to assist you. The geographic distance between yourself and you client manager is not a major issue in this day and age.

Smart Factoring Quotes have an office in Ryton in the Tyne Valley just outside Newcastle and offer free, impartial and independent advice about factoring in Newcastle and around the North East. We use a nationwide network of lenders from across the UK to ensure that your business ends up with the lender best placed to meet your needs.

We already have clients in Newcastle, Sunderland, Durham and the surrounding areas and would be delighted to hear from you.

As an invoice finance broker I speak with a lot of businesses who are looking for cash flow solutions for their businesses.

It would be fair to say that their is a real mixed reaction towards invoice finance and especially factoring. A lot of this relates to the perception that factoring is a last resort and I would argue that this is certainly no longer the case.

However, having read various posts on several forums their seem to be some common complaints about factoring companies. These include hidden costs, actual prepayment not been as high as quoted headline rate, reserves and retentions, lengthy contract periods and poor service levels. Unfortunately in a lot of cases I feel that this business owners do have a valid case.

Another area that received a lot of publicity on the FSB forums is the hefty collect out fees and early termination fees that can be levied by lenders. These can often be totally out of sync with the work load required to collect in any outstanding debts and many view these charges as opportunistic.

If you have any valid complaints and you wish to air these experiences we will accept posts on this forum – please use the comment box below. However, we will not allow “witch hunts” so please do not name individuals and please try to stick to the facts.

If you are looking at an invoice finance facility in Edinburgh your first port of call should be Smart Factoring Quotes. Smart factoring Quotes specialise in arranging factoring and invoice discounting facilities and we understand which lenders are best placed to help businesses in Edinburgh.

Our approach is as follows:

  • we explain in full what your options are
  • We explain all hidden costs and other things that you should be aware of
  • our aim to allow you to make an informed decision
  • we aim to structure facilities to maximise cash generation and minimise costs

If you are a business based in or close to Edinburgh please give us a call. Our aim is to save you valuable time and money by taking the stress and uncertainty out of arranging an invoice finance facility.

Northern Ireland has a new commercial finance provider in the form of Keys Commercial Finance.

Keys Commercial Finance are based in Belfast and Brian Sumner who is the ex CEO of Ultimate Finance is an investor and I understand is also mentoring them. They have entered into a back to back finance facility with Venture Finance who in turn are owned by ABN Amro who are a state owned Dutch bank.

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GE Capital have today announced the acquisition of Credit Agricole Commercial Finance.

At the top end of the ABL market this represents quite a serious consolidation.

Rumours about the future of Credit Agricole Commercial Finance have been rife and this hopefully draws it to a positive conclusion. I wish all those concerned all the best and will watch the developments of the coming months with interest.

I quite often speak to businesses who are considering whether to use invoice finance or an overdraft. They will usually ask which is the cheapest.

In short an overdraft is almost always cheaper than an invoice finance facility. I have read on other websites that the interest rates are lower for an invoice finance facility than they are for an overdraft and I would agree. However, the interest or discounting fees on an invoice finance facility is dwarfed by the service fee costs. By way of a simple comparison an overdraft may attract a 1% arrangement fee so for a £100,000 overdraft the arrangement fee is £1,000. This is compared to a £100,000 invoice finance facility where a 1% service fee could be levied against the gross turnover of the business. If the VAT inclusive turnover is £1m then the annual service fee is £10,000.

So is an overdraft cheaper? Typically yes.

So why would a business use an invoice finance facility? In short because an overdraft is not available. Banks no longer secure overdrafts by way  debenture where the major asset is the debtor book.

Therefore for many businesses an invoice finance facility is the only option. If you are one of these businesses looking for a working capital facility to ease cash flow pressures it is important to consider your options. Whether you are factoring or invoice discounting it is important to remember that the lenders are not the same. They all have very different capabilities, criteria and pricing structures.

Factoring in London is available from several companies. The London office of Smart Factoring Quotes based in York Street is well placed to advise any company on the invoice factoring and invoice discounting options available to them.

As a London based company looking for factoring you have access to the factoring arms of the major banks along with the London based independent invoice finance companies. This includes most of the major players. Importantly you also have access to the independent factoring companies from outside London. There are some great offerings from companies based in the North such as Manchester and Leeds but also from independents based in the South East and the South West such as Bristol.

The geography of your provider should not be a major consideration. Far more important is the ability of that lender to meet the unique requirements of your business. With any type of invoice finance facility, whether it be invoice discounting or factoring the structure of the facility is everything. It will determine how well it will work for you. Pricing is obviously important but should always be second to structure.

If you are looking to invoice discount it is worth considering your options very carefully. Different invoice discounting companies operate in very different manners. Depending on how your business operates it could make a huge difference to the amount of working capital your facility generates and also how much the finance costs.

Let’s take a quick look at these 2 areas and see what can happen:

What can impact on costs when invoice discounting?

  • some companies operate a simple charging structure with just a service fee and a discounting fee. Other companies will charge for a variety of additional costs that are not always transparent. Additional fees can include set up fees, arrangement fees, audit fees, renewal fees, minimum service fees, minimum base rate and a whole list of other disbursements. I have been approached by some businesses where the disbursements were more than the main service fee. In effect this was more than doubling their expected costs.

What impacts on cash generated when invoice discounting?

  • beyond the obvious prepayment percentage are various variable that can impact on the amount of cash a facility generates
  • these include the overall facility limit, individual debtor limits, concentration limit, what invoices can be notified, the recourse period, etc..

Elsewhere on the forum I have gone into more detail but I just want readers to be aware that they should be looking beyond headline rates on both pricing and prepayment. It is imperative that any invoice discounting facility is set up properly and for that you need expert independent advice.