Trade finance is a great product for importers of goods to the UK. When combined with an invoice factoring facility trade finance can help to finance the whole trade cycle. This means finance can be provided right the way from the confirmed order from your customer right the way through to your customer settling the invoice.
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21
Oct
30
Sep
Cashflow Finance is currently under construction as a resource to help businesses who are looking for cash flow finance solutions.
The site will be aimed at businesses who are seeking advice about their cash flow finance options.
Read Full ArticleIt is interesting to see certain invoice finance providers now using specialist departments to deal with businesses that operate in the construction sector.
In part this is really good news for businesses that are definitely a part of the construction sector. If they are very much entrenched in contractual debt, applications for payment and stage payments then a lot of businesses would not have a suitable cash flow solution. Now they at least have an option albeit an expensive one with low prepayments. That said it is probably structured and priced according to risk although part of me feels in some instances lenders are taking advantage where they feel they are the only lender willing to assist.
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15
Aug
For many businesses invoices discounting provides the cash that is needed to ensure that their business can survive. Without the necessary cash they cannot pay employees or suppliers. Customer payment patterns can be erratic and can cause cash flow issues and headaches.
Invoice discounting is typically the cheaper of the invoice finance facilities available to businesses. It can also be confidential meaning your customers are unaware of any lenders involvement.
In terms of qualifying for invoice discounting it really rests on processes rather than financial performance. Don’t get me wrong financial performance is important but without the right processes in place you will not qualify for invoice discounting no matter how profitable you may be.
There are 2 main process that will be looked at. Your invoicing process will be interogated. It is important that a good audit trail exists and that invoices are raised in arrears of delivery.
Your credit control process or procedure is also important to demonstrate that debts are collected methodically and professionally rather than not at all or on an ad hoc basis when you have time.
If your invoicing process is not right it is unlikely any type of invoice finance facility will be made available. If your credit control procedures are not adequate it is likely a factoring facility would be offered rather than an invoice discounting facility.
10
Jul
I see a lot of clients who insist from the outset that they want an invoice discounting facility but most of them don’t actually know why.
Invoice discounting is available and importantly it is more readilily available than it used to be. However, factoring is the easier facility to obtain is it represents lower risk to the lender.
So what can invoice discounting offer?
Confidentiality – yes invoice discounting can be confidential but some companies insist on a disclosed facility. Factoring, however, can also be a confidential facility or a disclosed facility.
Control – some companies prefer to keep the credit control in-house rather than outsourcing to a factoring company. So invoice discounting allows a business to maintain control over the credit control function. However, so does a CHOCS facility which is a type of factoring facility.
Cost – many feel that invoice discounting is cheaper. Certainly for larger businesses I would agree. However, at lower levels of turnover there is probably not a lot in it.
Rather than deciding that invoice discounting is what you want I think it is important to consider the structure of your facility, the characteristics you want and then the costs of such a facility.
Construction factoring is a topic that we have covered several times on this forum.
It is a sector that struggles to find suitable forms of working capital finance as banks are reluctant to offer overdraft facilities and invoice finance companies are uncomfortable with the risks associated with the construction industry.
Read Full ArticleWe were recently approached by a haulage business based in Glasgow who wanted to review their facility. It was a very nice business and they advised that they had only ever reviewed their facility with the Scottish banks. Given the recent well publicised problems they wanted to look at other alternatives. It should also be stated that they are a Scottish registered company.
While we knew the companies that could provide factoring Glasgow to a Scottish registered company we decided to go back to the market to see if anyone new had this capability. We were delighted to see that a few new lenders now had the capability to help businesses based in Scotland and were very keen to do so.
In short we were able to source a very competitive facility for our client.
If you are a business based in Glasgow or anywhere else in Scotland it really is worth exploring what opportunities are available to you.
14
Feb
Recruitment finance can take various formats. Typically it depends on the type of recruitment and also the size of the company. We will look at the three main options available:
Recruitment factoring: this is suitable for recruitment companies of all sizes and for both temporary recruitment companies and permanent recruitment companies. It provides an advance against invoices raised of up to 90% allowing temps wages to be paid. It is also suitable for permanent recruitment companies but prepayments are typically around 70% for perms. Recruitment factoring is available to new start businesses aswell as larger well established companies. It includes a credit control service and can also include credit protection to reduce the risk of bad debts.
Recruitment invoice Discounting: suitable for companies that are better established and have a good credit control function within the business. This type of recruitment finance does not include a credit control service. It can be confidential or disclosed and can include credit protection to reduce the risk of bad debts. Again it can be used for either temporary recruitment or permanent recruitment.
Recruitment back office solutions: well suited to recruitment companies that want to outsource the full back office function. This service can provide finance in the same way as factoring but 100% prepayment levels can be achieved. It also includes payroll and admin services as well as optional credit protection and credit control.
If you have a requirement for recruitment finance it is worth contacting Smart Factoring Quotes to discuss your options in detail.
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