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Invoice factoring Company

Recently we were approached by a landscape gardener than needed assistance in raising some working capital. The family owned business has issues as they were working for the well known house builders. These clients would take a long time to pay and in the meantime they had to pay their workers weekly.

They had approached their own bank who were unable or unwilling to provide an overdraft facility. They referred them to their invoice finance arm who were unwilling to assist as the business was considered to be in the construction industry as they were required to submit applications for payment to the house builders like any other contractor. From there they had approached several independent invoice finance providers who were unwilling to help for the same reasons. The landscape gardener then approached us at Funding Solutions UK.

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The best factoring company for your business will depend on the unique characteristics of your business and importantly on your own requirement.

The main aspect of any factoring companies proposition is the structure of their facility, service levels and pricing.

Structure of a facility

It is imperative that the facility is structured to meet the needs of your business but some lenders may not be able to structure a facility to meet your needs. Some lenders have a credit policy that will not allow them to finance any debtor that exceeds over 25% of your total ledger. If you have one large customer that accounts for a large proportion of your sales ledger or all of your sales ledger such a lender would prove to be restrictive. You will need a lender that does not have such stringent criteria when it comes to concentration limits. Another example can be exports. Some lenders will simply not finance export sales so if you have export sales or are looking at export sales than you need to consider a lender that can finance those sales. Smart Factoring Quotes understand the capabilities and requirements of each lender in the market.

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I am often amazed at how much disbursements cost factoring clients over and above the ‘headline’ charges. It is not uncommon for some clients to be paying more in disbursement charges than they do in service fee and discounting fee combined.

I was with a client yesterday where this was the case. When I spoke to them about the fees they were very upset about the ‘games’ the factoring company concerned were playing.

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Smart factoring quotes have a new and improved website.

The site has been restructured to ensure that navigation is now easier and a bespoke quotation can be started and obtained from any page.

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If you are looking for a factoring company then it is imperative you choose the one best suited to your business and your factoring requirements.

Factoring companies all differ in terms of how they structure facilities, what restrictions they impose and of course how they price their facilities.

In a basic level each factoring company offers different prepayment levels and different pricing structures.

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We often get asked to recommend the best invoice finance company. I thought I would look at what makes a good invoice finance company.

In part it is a case of horses for courses. Some lenders are well suited to small businesses while others are better suited to larger businesses. The same goes for different sectors, different geographic locations and different scenarios.

Common complaints with lenders surround poor service levels. I must admit in some cases it is simply because the lender has said no to a client. Sometimes this is justified and in other instances it just seems like a lazy answer rather than doing some work to solve a problem.

Some lenders genuinely pride themselves on top quality service levels and customer satisfaction. This however can be a double edged sword as the same lenders can be described as expensive in comparison to lenders who cut corners and provide a poor service.

Communication is a key factor. As an invoice finance broker I can fully appreciate this. It seems like the most basic concept in any business relationship but I am often left amazed at how many lenders simply fail to return calls or e-mails both with myself and clients.

They say that service is inseparable from the people that provide it. This means that staff within invoice finance companies need to be engaged and happy. This comes as a result of fair remuneration, good training, clear goals and a good environment to work in. Some lenders clearly provide this while I know that others simply don’t. It may be a bit of a generalisation but the lenders that treat their staff properly also seem to be the 0ones that treat their clients properly.

Recruitment Finance is a new site that has been launched by the Cash Flow Solutions group.

While it is still under development it will provide an in depth guide on what facilities are available for recruitment companies.

Recruitment companies typically access recruitment finance to allow them to pay wages of their temps. This can take the form of a simple invoice discounting facility, a factoring facility with the added benefit of a credit control service or a full back office solution that provides a full back office service.

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.

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