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Stories Tagged ‘Invoice Finance Broker’

Invoice finance is a form of finance that can provide valuable working capital to your business. I want to explore objectively the advantages and disadvantages of invoice finance.

Advantages of invoice finance

  • invoice finance can provide up to 90% of the value of your sales ledger and ongoing invoices as cash to use within your business.
  • this may allow you to take advantage of settlement discounts
  • if you use factoring you can outsource the credit control of your business freeing up more time to concentrate on growth
  • by taking up credit protection you can eliminate the risk of bad debts
  • an invoice finance facility should grow in line with your sales

Disadvantages of invoice finance

  • an invoice finance facility can be costly when compared to an overdraft facility. However, this is not always a real option.
  • some people perceive factoring as losing control of your sales ledger rather than outsourcing.
  • some people also feel that there is a stigma attached to factoring
  • you can be tied into lengthy contracts and notice periods which can be restrictive
  • hidden costs or at least costs beyond the headline rates can cause frustrations
  • retentions and other restrictions on the funding can also mean that the true prepayment level is not what is expected or anywhere near the headline rate

I believe that an invoice finance facility can work very well in the right circumstances. However, it is important to understand exactly what is on offer. hat means you must understand the total costs involved and also the mechanics of calculating the cash made available.

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 find a suitable provider.

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.

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.

Smart Factoring Quotes are proud to announce the launched of their new and improved website.

Our aim has always been to provide business owners with a balanced view on invoice finance. The new site is more informative and we want to be the preferred source of online information for business owners looking for an invoice finance facility. We want to empower business owners to make an informed decision. That informed decision can be about choosing whether or not to use a form of invoice finance, which facility to use or which lender has offered the most competitive terms for their business.

If you are a business owner who is considering entering into an invoice finance agreement or reviewing your existing arrangements make Smart Factoring Quotes your first port of call.

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.

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.

North East Factoring

As a business owner in the North East factoring could provide your business with the cash flow solution it needs to grow and prosper. It is no secret that businesses are taking longer and longer to pay their invoices and as such many business owners have cash tied up in their debtor book. Factoring could be the answer to your cash flow problems but it is important to understand all costs and risks.

Smart Factoring Quotes has an office based in Ryton, Newcastle and works with local businesses to explain not only the benefits of invoice finance but also the costs and risks involved. You can contact us for impartial advice. We are happy to answer any questions and we are totally independent to you can rest assured our advice is impartial.

We don’t believe in the hard sell approach and our aim is to provide you with all the information you need to make an informed decision. This means a balanced approach in explaining the downside of factoring such as the costs and the risks you take in providing security such as personal guarantees and indemnities. Until you fully understand the benefits and the associated costs and risks of any finance facility how can you make a decision?