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Stories Tagged ‘Invoice Factoring Quotes’

28 Jan

Factoring rates »

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Factoring Rates can differ dramatically from lender to lender. We will have a look at what variables impact on the pricing of a factoring facility and then we will look at why some factoring companies are more expensive than others.

What impacts on the service fee?

The service fee is what the lender charges for administering your facility and it is typically determined by workload. This is dictated by the number of debtors you have an also the number of invoices you issue. Turnover also has a huge impact on your service fee and typically the higher your turnover the lower the percentage service fee.

The discounting fee, what impacts on this?

This is the cost of borrowing and it should reflect the risk the company is taking. The total fee is made up of the base rate and the margin. Some lenders use the Bank of England base rate while others use LIBOR. Watch out also for the minimum  base rates which a lot of lenders put in place. The margin is often dictated by their credit policies and with negotiation can often be reduced.

These are the 2 main fees but it is important to be aware of additional fees and charges. Always consider total costs when looking at different offers. Please also consider what service is actually on offer and ensure it meets the needs of your business. Factoring rates are obviously importants but so are service levels and facility structure.

30 Nov

Invoice Finance Brokers Owned by Insolvency Practitioners – Why? »

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There seem to be several invoice finance brokerages appearing that are linked to insolvency practitioners. Only today I was asked by a client of mine why this was so I thought a post may be due on the topic.

In short the insolvency practitioners see the invoice finance leads that give to lenders as a carrot to attract insolvency work from the lenders. In fact some of the IP owned brokers will only give leads to lenders if they give them insolvency work in return. I have seen some e-mail marketing from one such broker offering 2 new deals to a lender in return for a ‘fee generative appointment’.

Reciprocity is a buzz word in many industries these days and the invoice finance industry is no different.

However, in my opinion it does raise concerns for business owners who approach these brokerages looking for independent and impartial advice about factoring or invoice discounting. There is every chance that the business will simply be placed with the lender that they ‘owe’ a deal to. If this is the case it means that they are not really acting in the best interests of that client.

30 Oct

Temporary Recruitment Factoring »

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Temporary Recruitment companies will often use some form of factoring or invoice discounting. It is almost a necessity in terms of how their cash flow works. Typically they are invoicing clients on 30 day terms and yet they are having to pay wages on a weekly basis.

A factoring agreement can provide up to 90% of the invoice value the day after the invoice is raised. This means that wages are covered and you don’t have to worry about waiting for clients to pay.

As an alternative to temporary recruitment factoring there are also full back office solutions that will take care of almost everything except finding clients and temp staff!!

If you are looking for a funding solution for your temporary recruitment company it is worth speaking to Smart factoring Quotes to fully understand what your options are. Smart Factoring quotes have helped to source facilities for temporary recruitment companies who are new starts all the way through to companies with turnovers in excess of £50m.

12 Oct

Factoring in Birmingham »

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We have recently been approach by several businesses in and around Birmingham who are looking for factoring facilities. Being based in Birmingham has some serious advantages as it means that virtually every factoring company in the UK can service businesses there as they are so central in terms of location.

The challenge for any business based in Birmingham is choosing the right lender. Not all factoring facilities are the same – far from it. As most require a contract to be signed it is important you choose the right factoring facility and lender.

Invoice finance companies each have their own target market and this will be based on business turnover, sector, geography, debtor profile, etc..

Smart Factoring Quotes will look to understand your business and can recommend which factoring company is best placed to help your business.

If you are looking for factoring Birmingham please call Smart factoring Quotes today on 0845 863 0738.

11 Oct

Fixed Fee Factoring »

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Fixed fee factoring is ideal for businesses looking for a single flat monthly fee when factoring.

Research has shown that small businesses find factoring charges confusing and unpredictable. Fixed fee factoring takes away this confusion by combining all the charges into an easy to understand single monthly factoring fee. It is easy to budget for and provides a valuable boost for the cash flow of a small business.

It is ideal for a business with a fairly smooth cash flow. However, if your turnover is more variable you could find yourself paying the flat monthly fee in a month where you have not had any turnover in which case you would be paying for nothing.

An alternative to fixed fee factoring could be a bundled fee deal. This is a single fee but is charged as a percentage of each invoice with no minimum fees. It is arguably as easy to understand as a fixed fee deal but is more flexible.

26 Sep

Factoring Companies Leeds »

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We are often approached by companies looking for factoring companies in Leeds.

This request usually comes from companies who are in and around Leeds and want a local provider. Fortunately there are a good choice of factoring companies in and around Leeds. The right one for you will depend on the size of your business, your sector and your financial performance.

There are also a large number of factoring companies outside Leeds who are happy to help Leeds based businesses with a factoring facility.

Smart factoring Quotes would be delighted to help you frind a suitable provider.

22 Sep

Factoring Advice – Who to trust? »

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When looking for factoring advice I am always amazed at who people approach. I accept that my views may be tainted somewhat as I am a factoring broker but it is what I specialise in and I know and am 100% impartial.

Let’s have a look at who business owners will approach to obtain a recommendation for factoring:

Bank managers – your bank manager will only ever recommend their own bank’s factoring company. They are heavily targeted to sell this product so you will receive a single recommendation not taking into account what your requirement is or what the market can offer. In contrast a factoring broker can look at your requirement and recommend the lenders best placed to meet your needs.

Accountants – unfortunately a lot of accountants take commissions from invoice finance providers (as do invoice finance brokers) The problem is that accountants do not specialise in setting up invoice factoring facilities and often do not look at it as in depth as they should. They will also have a few localised relationships rather than using the whole market.

Brokers owned by factoring companies – some brokers are actually owned by factoring companies. As such guess who they are most likely to recommend? If you are using a broker at least ensure they are independent and impartial.

Brokers owned by insolvency practitioners – this may seem like a strange relationship but insolvency practitioners are keen to be appointed by factoring companies. If they can offer factoring companies new business they are likely to receive more appointments. As such you could find yourself placed with a factoring company they owe a favour to rather than the one best placed to meet your needs.

In my opinion you should be taking factoring advice from a specialist and someone who is 100% impartial and independent.

There are a lot of good brokers in the market who are specialists and totally impartial.

At Smart Factoring Quotes we are totally independent and impartial. We are also specialists as invoice finance is all we do.

05 Sep

Factoring No Minimum Contract »

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Factoring agreements are typically for 12 month periods with either a 3 month or 6 month notice period.

However, there are companies offering factoring with no minimum contract.

You could opt for a trial period, a rolling 28 contract or a rolling 3 month contract. Smart Factoring Quotes can help you access all these types of agreements.We will also explain in full the fee structure so you have a full understanding of what you will be paying.

We understand the invoice factoring market and all that it can offer. We also understand the frustrations that businesses face when looking to set up these agreements. We understand how to get you the invoice finance facility that you want.

If you are looking for a factoring agreement anywhere in the UK or Ireland we are here to help you. Visit the Smart Factoring Quotes website or call us for a chat on 0845 863 0738.

29 Aug

Cheap Factoring for Small Businesses »

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Cheap factoring for small businesses is now available. Typically the minimum fees levied by lenders made factoring particularly expensive for small businesses with a turnover less than £500,000. Some may argue that there is no such thing as cheap factoring no matter how big your business is but I believe that a cost effective solution now exists.

At Smart Factoring Quotes we have a bundled fee solution which means that you pay one simple fee as opposed to a seperate service fee and discounting fee. For a recourse factoring facility this fee is 1.95% of the each invoice. If you wish to include credit protection to protect you against bad debts this fee increases to 2.95%.

This has been well receieved by virtually all small businesses that I have spoken to. The benefits include:

  • up to 85% prepayment against your invoices providing valuable working capital for your business
  • no minimum fees which can prove expensive when turnover dips
  • easy to calculate fees which can easily be priced into your product or service price
  • optional credit protection to protect you from bad debts

Typically my advice also includes an explanation about hidden costs as detailed in other posts on this forum but with this facility it is easy to use, transparent and easy to understand.

Contact us on 0845 863 0738 for more details about the cheap factoring solution for small businesses

20 Aug

Selective Factoring – Case Study »

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Selective factoring was recently set up by Smart Factoring Quotes for a security company based just outside Chester in the North West of England. They had landed a large contract worth over £400,000 over 3 months. They had to invoice monthly on 90 day terms and yet they were paying their security staff weekly.

They approached with a view to spot factoring the 3 individual invoices. We looked at their options and found that selective factoring was by far and away a cheaper option. Selective factoring means that you factor all the invoices of a particular debtor whereas spot factoring means you can pick and choose individual invoices. The difference in this instance is subtle but the difference in cost was dramatic.

Selective factoring worked out almost 10 times cheaper in this instance. The facility will allow our client to take on a lucrative contract and meet it’s weekly wage demands. Profits will be increased because of the selective factoring facility.

The most suitable solution for your business will depend on your own individual requirements. Contact us today on 0845 863 0738

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