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Invoice Discounting

08 Mar

How long does it take to put an invoice – finance/factoring/discounting facility in place? »

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How long does it take to put in place an invoice finance, invoice factoring or invoice discounting facility?

Well the flippant answer is ‘how long is a piece of string?’ However, that helps nobody. On average I would say it takes 3 weeks but I have seen it done in 2 days. While the broker and factoring company plays a very big part in the process it does rely heavily on the requirement and the information that the prospect can provide.

I remember looking at an ‘urgent requirement’ last May and advising we could have a facility in place for the ‘following friday’. While we had everything in place the prospect simply let everyone down by not being able to supply simple information – such as a copy of his passport. This rumbled on until October!!

The flip side of this is a prospect that phoned me on a Saturday evening advising he needed a £1.7m facility in place by the Wednesday. I advised him everything I would need and I had it on Sunday morning. The facility was in place to meet his deadline.

The other key things to achieving a quick turnaround is a) knowing which invoice finance company can meet your needs and b) knowing which person within that company to speak to.

24 Jan

Best Invoice Discounting Rates »

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If you are looking for the best invoice discounting rates it is well worth speaking to Smart Factoring Quotes. We monitor the market for the cheapest invoice discounting rates available at any one time.

At present we have several invoice discounting companies who are actively competing on price and claiming they will not be beaten on price. It is however imperative that any business owner looks beyond the headline rates and considers total costs when comparing facilities from an invoice discounting company. It is also important to remember that the lenders offering the best rates can be among the most risk averse and as such your facility may be structured in a more cautious way.

At Smart Factoring Quotes our approach is to explain the benefits and potential downside of any facility and along side this show the total annual costs involved. This will allow any business owner to consider which facility represents the best value. To me that is the most important factor – compare the benefits the facility offers against the costs and then establish which facility represents the best value to your business.

If you want a helping hand give us a shout!!

07 Jan

Invoice Discounting Quote »

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Invoice Discounting Quote

For an invoice discounting quote it is worth looking at Smart Factoring Quotes to see what can be achieved.

While costs are important it is also worth taking time to consider which company is best placed to meet the unique requirements of your business. Not all invoice finance companies are the same and the difference between a well structured invoice finance facility and a badly structured one can be dramatic. When looking at invoice finance quotes and terms it is important to consider structure as well as costs.

If you require an invoice finance quote Smart Factoring Quotes can assist by:

  • targeting lenders who are aggressively seeking new business. Our market knowledge can save you time and money.
  • explaining the both the advantages and disadvantages of each offer both in terms of pricing and structure of each quote or offer you receive. We merely enable you to make an informed decision rather than selling any particular solution. Only you can decide what is best for your business.
01 Dec

Recruitment Company – Invoice Discounting »

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Recruitment companies often use invoice discounting however very few have optimised their facilities in the market place.

Invoice discounting is an ideal solution for temporary recruitment companies that are on monthly payment terms but have to pay wages weekly. The invoice discounting facility can be confidential which means customers are unaware and in comparison to factoring the facility is typically cheaper.

In terms of a recruitment company optimising an invoice discounting facility for both costs and cash generation they should consider the following:

  • use the invoice finance market to your advantage and look to see which lenders are hungry for new clients.
  • look beyond the headline rates and consider total costs over a 12 month period.
  • remember you are part of a preferred sector so don’t be shy to negotiate strongly to reduce rates.
  • when looking at cash generation ensure that limits are available at least for your top debtors.
  • look at how a concentration limit could limit your funding – this is very important if you have a customer that makes up a large part of your turnover.
  • consider raising finance against your perms – some lenders will offer a 70% prepayment against perms.
25 Nov

Invoice Factoring – Newcastle »

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Invoice Factoring – Newcastle

Invoice Factoring is available throughout the UK but which invoice factoring companies have a true presence in Newcastle? Smart Factoring Quotes have an office in Newcastle.

Newcastle was an industrial heartland of heavy industry within the UK but today it is not dominated by large industrial employers. It thrives on the back of local entrepeneurs who have started successful SME’s.

These SME’s require funding and for businesses that sell or provide a service to other businesses invoice factoring or invoice discounting can be an ideal solution.

Newcastle is actively covered by several players. These include Bibby Financial Services, Aldermore Invoice Finance, Lloyds TSB Commercial Finance, Close Invoice Finance and Skipton Business Finance. There are also another dozen or so lenders who are very happy to assist businesses in and around Newcastle.

Smart Factoring Quotes also have an office in Newcastle and a real desire to help local SME’s. If you are an SME in Newcastle looking for a factoring facility it is worth understanding which lender and which product is best suited to your business. Smart Factoring Quotes can help you find both the right lender and the right product – simply contact us on 0845 863 0738 or visit or website. We can assess all the local offerings and also draw on contacts across the UK to find the best solution for the requirements of your business.

Each lender has very different criteria and capabilities. They are each suited to different types of businesses and it is imperative that you select the right lender for your business. Entering into what is typically a 15 -0 18 month contract with a lender that can’t really provide what you are looking for can be very detrimental to you business. It can also be very time consuming and costly.

15 Nov

Factoring – Collect Out Fees and Early Termination Fees »

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I have recently been participating in a forum hosted by the factoring.

It was unfortunate that the majority of posters were passionately negative about the invoice factoring industry. Their main gripes seemed to revolve around:

  1. The work between the invoice finance providers and the insolvency practitioners that they did not believe was in the best interest of the actual client.
  2. Hefty early termination fees when a client looks to leave.
  3. Hefty collect out fees levied in the event of failure
  4. The lack of transparency with regards to pricing and hidden charges.

There were perhaps half a dozen passionate posters on the thread who had suffered bad experiences. This is in comparison to over 42,000 businesses that actually use invoice finance.

However, it does suggest that there are some unsavoury practices within the industry that should be stamped out.

11 Nov

Invoice Factoring – Maximise Prepayment »

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Invoice Factoring – Maximise Prepayment

We have discussed several times on this blog that headline rates from invoice factoring companies can be misleading. If we put pricing to one side we can look at how you can maximise the amount of cash that your facility will generate.

Debtor Limits – some lender will assess each individual limit while others will only check debtors over 10% of the ledger. It is important you can get funding against your debtors. If you can’t the prepayment level is a red herring.

Minimise Dilution – the higher the number of credit notes you issue the lower the prepayment a lender will offer you. It is therefore important to concentrate on the quality of administration, pick & packing, etc.. to ensure credit notes are kept to a minimum.

Additional Security – lenders may look to increase your prepayment level if you can offer additional security. This could take the form of a personal guarantee, a charge on some unencumbered machinery or a charge against a property. It is really a show of confidence from you as a business owner and offers the lender additional comfort.

Change in Facility – if you have an invoice discounting facility you may get a better prepayment level if you move to a disclosed facility such as invoice factoring. It gives the lender more comfort and as such they may be willing to increase their exposure by increasing prepayment levels.

20 Oct

Invoice Discounting v Overdraft facility – Fees »

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Invoice discounting v Overdraft facility

This is a question that I am often asked and unfortunately it is a purely academic question for most businesses. Due to certain test cases relating to floating charges banks are no longer comfortable to lend on overdraft where the major asset within a business is the debtor book. On that basis invoice finance is typically the only option available to a business.

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