Cash Flow Finance

31 Aug

Import Finance and Factoring »

Trade finance facilities such as a letter of credit combined with a factoring facility can provide an ideal solution for importers. This combination can allow importers who take confirmed orders from reputable customers to pay their supplier. By funding the full trade cycle it allows them to raise finance from order right through to when their customer pays.

How does this work?

The importer receives a confirmed order
They place that order with their supplier
A letter of credit is raised in favour of the supplier
Good are shipped and when received the supplier receives payment from the LC
Goods are delivered and an invoice is raised
The factoring facility repays the LC
When the customer pays the factoring facility is repaid

Requirements:

A confirmed order
from a credit worthy customer
usually a 20% profit margin is required

Security

Some banks require tangible security in the form of cash cover or a charge on property. However, within the market there are lenders who will happily raise an LC on the back of a confirm order.

20 Aug

Selective Factoring – Case Study »

by Invoice Factoring Forum

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.

16 Aug

Smart Factoring Quotes – New Improved Website »

by Invoice Factoring Forum

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.

15 Aug

Factoring Companies in the North East »

by Invoice Factoring Forum

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.

04 Aug

Invoice Finance Edinburgh »

by Invoice Factoring Forum

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.

03 Aug

Northern Ireland – Keys Commercial Finance »

by Invoice Factoring Forum

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.

Read Full Article

02 Aug

Invoice Finance or Overdraft »

by Invoice Factoring Forum

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.

31 Jul

Factoring London »

by Invoice Factoring Forum

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.

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