Cash Flow Finance

22 Aug

Confidential Invoice Discounting »

Confidential invoice discounting is the ideal invoice finance product for businesses that want to do their own credit control and do not want their customers to know that invoices are being funded. Confidential invoice discounting provides businesses with working capital and will prepay up to 90% of the gross invoice value.

Confidential invoice discounting can however be very hard to come by due to the criteria invoice finance companies put in place.

Lenders look beyond the basic invoice finance criteria of selling to other businesses on credit terms and invoicing in arrears of delivery. Lenders will look more carefully at a businesses financial performance and they expect a robust balance sheet. Equally important are the processes that a business employs to collect in outstanding invoices.

10 Aug

Asset Refinance – Can it assist cashflow? »

by Invoice Factoring Forum

Asset refinance is typically the re-financing of equipent or vehicles already owned by a company.

This can be done to inject cash into the business when the assets are unencumbered. In this instance there will be an initial injection of cash into the business but equally there will be additional monthly repayments that will need to be met.

Alternatively assets can be refinanced to reduce the monthly repayments on an existing finance agreement. This can be done by spreading the repayments over a longer term. Typically this will be done to reduce monthly repayments and as such it has a positive impact on cash flow.

The assets that are suitable for refinance are what we terms hard assets. These are durable, identifiable assets that can easily be valued and readily sold. Suitable assets include vehicles, printing presses, earth moving plant, etc.

25 Jul

Invoice Finance Quotes »

by Invoice Factoring Forum

Invoice finance quotes can differ dramatically.

They can differ in different ways and for different reasons and it is important to compare like with like. We have touched on this elsewhere on this forum and this article is worth a read – http://www.invoicefactoringforum.com/invoice-factoring-quotes-comparison/

However, when considering any invoice finance quote is is important to understand the following:

what service is actually being offered. Please remember that a full factoring offer that includes a credit control service and bad debt protection will cost less than a finance only facility.
have you considered total costs? different companies charge different fees beyond the headline rates of the service fee and the discounting fee. Some service fees are all inclusive while other companies charge for nearly everything on top of the service fee.
What is the quality of the service? Remember you get what you pay for.
Is the structure of the facility right for your company? If not then no matter how cheap it is you are wasting your money.

I feel it is important to find the right structure and then properly evaluate total costs to allow a genuine comparison.

15 Jul

Trade Finance »

by Invoice Factoring Forum

Trade finance can be a valuable source of finance that can facilitate international trade. We typically use trade finance along side an invoice finance facility to assist importers.

If an importer has a confirmed order from a credit worthy customer we can provide a letter of credit to a supplier guaranteeing payment. They can then ship the goods. Once received the supplier is paid by the LC. The goods are delivered and an invoice is raised. An invoice finance facility can finance the invoice which repays the trade finance facility. When the customer pays the invoice finance facility is repaid.

The whole transaction from start to finish is financed. This allows small businesses to accept large orders they would otherwise have to turn down because of lack of working capital.

10 Jul

Invoice Discounting – is it the Holy Grail of invoice finance facilities? »

by Invoice Factoring Forum

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.

10 Jul

Construction Factoring »

by Invoice Factoring Forum

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 Article

11 Apr

Invoice Discounting »

by Invoice Factoring Forum

When speaking with clients we are often asked to source invoice discounting facilities on their behalf. When I press the prospect on why they want invoice discounting it is often because they feel the facility is confidential and they want to retain control of their credit control.

I think traditionally invoice discounting was confidential but I am seeing more and more lenders insisting upon disclosure and disclosed invoice discounting seems to be more common.

If you are looking to retain control of your credit control then invoice discounting whether confidential or disclosed will meet your needs. You may also consider a CHOCS facility which is essentially factoring but allows you to do your own credit control. CHOCS stands for Client Handles Own Collections and just to confuse matters it can also be disclosed or confidential. Typically a CHOCS facility will be more readily available than an invoice discounting facility because the criteria are less stringent.

If you are looking for a confidential facility then obviously a confidential invoice discounting facility will meet your requirements. However, you may also wish to consider confidential CHOCS which is more readily available and also confidential factoring where credit control is done by the factoring company but in the name of your business.

28 Feb

Factoring in Glasgow »

by Invoice Factoring Forum

We 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.

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