0845 643 9485
Call now for expert advice

Latest Stories

We have several invoice factoring clients who operate in the scaffolding industry. They have always found it difficult to find invoice factoring companies who want to lend to them because of the industry that they operate in. However, as an industry scaffolders require cash flow finance because the house builders are slow to pay yet wages need paying weekly. On top of that funding for tubing is hard to come by and often has to be hired in at high rates or bought for cash which only compound the problem.

Read Full Article

Export Factoring is an excellent way of funding cashflow relating to international trade on open terms. It allows a business to smooth it’s cashflow, collect debts efficiently and through the inclusion of debtor protection can reduce risk.

Most invoice factoring companies will want a credit insurance policy in place to ensure that the companies you are selling to are credit worthy.

However, not all invoice factoring companies will provide funding against exports and as such by choosing the wrong lender your funding can be severely restricted. If you have exports or are looking to grow your business in the international market it is important to choose the right invoice factoring company.

Some lenders claim to provide funding against exports via Factors Chain International (FCI) but while it is an excellent idea it remains cumbersome. Rather than taking the risk themselves they use a local factoring company to take the risk. If for example you have a debtor in Australia, they will use another FCI affiliated factoring company in Australia to provide the limit, take the risk and collect in the debt. This sounds like a good idea and I believe it is a good idea. The problem is that it is very slow when you are looking for a credit limit and can be cumbersome throughout.

In my opinion you want a UK based lender who will provide the funding and accept the risk themselves. If they require the sales to be credit insured then so be it.

By choosing either an invoiuce factoring or invoice discounting facility you can decide whether or not you require a credit control function. Some lenders will offer a service in variety of languages which can be very effective when collecting debts in countries that speak other languages.

If you require export factoring it is worth contacting Smart factoring Quotes to establish which lender will be best suited to your requirements.

Shares in the invoice finance company Ultimate Finance were suspended this morning. This is apparently due to a reverse takeover.

This is where a private company looks to acquire the shares of a Plc so it can control the board. It typically allows them to merge and enjoy Plc status without going through all the red tape of becoming a plc.

Various rumours are circulating as to which company is looking to do the reverse takeover.

It will be interesting to see what happens.

Single Debtor Factoring

Single Debtor Factoring can be hard to obtain – especially with any meaningful prepayment level.

There are only a number of invoice finance lenders who will consider a proposal where a client has only one customer. This number reduces dramatically as the required finance limit increases.

There is an argument that lenders should be willing to provide funding against a good quality single debtor such as Tesco and as stated some lenders are more than happy to do so. It does however increase the risk profile and typically they will need the debt credit insured. A major concern relates to disputes – the debtors willingness to pay rather than their ability to pay.

Lenders will often call this type of proposal 100% concentration

Smart factoring Quotes recently received an inquiry from a client looking for finance of £800,000 against a single debtor.

We were able to do a quick review of the market and establish which lenders were able to help. We received a lot of interest in the proposal but most lenders were unable to assist over a level of £500,000.

The proposal was very urgent for a number of reasons and we were able to agree terms with a lender quite quickly which were acceptable to the prospect. We were able to collate the required information quickly and get the facility set up in the timescales required by the prospect.

If you are looking for a invoice finance facility and you only have one customer please get in touch  with Smart Factoring Quotes today.

Factoring in Northern Ireland is an important form of finance for the area. However, which invoice factoring companies can assist in Northern Ireland?

We are fortunate to have an excellent client base in Northern Ireland and through recommendation have managed to support clients with good advice as to which lenders can best meet their needs.

I personally believe more invoice finance companies should show a willingness to do business here. There is an excellent market of businesses, the legal system is obviously the same as in England and the region is easily accessible by cheap flights from the UK. The geography certainly shouldn’t be used as a barrier to do business.

If you have a business in Northern Ireland and you are looking for an invoice finance facility get in touch with Smart Factoring Quotes today.

Tax issues are becoming more and more common. Certainly among my invoice factoring clients I have seen a recent rise in clients with HMRC arrears and no repayment plans in place.

12-18 months ago HMRC seemed more than happy to support SME’s during the credit crunch. HMRC were to many businesses the lender of last resort. However, there seems to have been a change in their attitude and when negotiating a repayment plan they are being aggressive and unfortunately in many instances unrealistic.

One of my invoice finance clients had been hit with a bad debt for £150,000. Although the business was and is profitable they racked up arrears on VAT and PAYE of £100,000. They survived the bad debt and were able to maintain their current HMRC liabilities once out of the rut but the arrears remained. In negotiating a repayment plan HMRC wanted full repayment within 9 months. Our client is in the haulage business and oprates on small margins – this repayment plan was simply impossible.

That said our client was happy to agree this because he had enough money to make the first payment and would worry about the balance later. HMRC had given him the alternative of a 9 month repayment plan or the would wind them up. Of course he wanted to accept the offer.

A lot of these people have never had arrears before and as such are inexperienced with dealing with HMRC. In talking to a business associate who specialises in negotiating with HMRC he believes businesses should stand their ground and demonstrate what is achievable. He has managed to negotiate time to pay agreements over 5 years but accepts the average is about 3 years.

Permanent Recruitment Factoring has often been challenging to source relative to sourcing a factoring facility for temporary recruitment.

While temporary recruitment has an excellent audit trail by way of an agreed payment schedule, a purchase order and signed timesheets permanent recruitment is dogged by onerous terms and conditions which can reneder an invoice worthless if the candidate leaves withing a given period. As such the perceived security of any lender is reduced dramatically.

Permanent recruitment was for many years considered worthy of a 50% prepayment at best and this is still the case with many lenders. In fact some lenders will not look at a recruitment company where the permanent recruitment accounts for 30% of turnover.

I am glad to say that this is not the case with all lenders.

Several permanent recruitment businesses have approached us recently looking for new facilities or looking to improve on existing invoice factoring facilities.

Smart Factoring Quotes have managed to achieve a 70% prepayment level on both invoice factoring facilities and invoice discounting facilities.

There are clearly some invoice factoring companies out there who have taken the time to analyse the risk of a candidate leaving their new job. I guess it can happen but will every client leave? Highly unlikely and as such a 70% prepayment seems acceptable – to lender and client alike.

Invoice Finance Brokers should in theory provide advice that is both independent and impartial. In my day to day work as a broker that is my aim with a view to offering advice as to what is best for my client.

There a a lot of excellent brokers in the market place all of who will act in the best interests of clients – and so they should I hear you say.

However, there are a few things that may surprise people looking at using an invoice finance broker.

One of the largest providers of advice about cashflow finance in the UK is actually owned by Bibby Financial Services. On that basis which lender do you feel they recommend more than any other? That is only an assumption on my behalf but you have to question their independence.

A broker that claims to be the largest online broker of invoice finance facilities was recently looking for introductions FROM lenders of clients they wanted to ‘manage away’. This is normal practice but in return they were offering them a new client. ‘Very nice’ you may say but what if it is your business that is passed to that lender simply to be used as a pawn. Why did the broker recommend a certain lender to you? Not because they were the best lender for you but because the broker involved owed the lender concerned a favour!! That is no way to conduct business.

Another major invoice finance broker offers services to the invoice finance lenders such as audit and survey services, collect out services, etc.. Lenders who are kind to them in terms of work will typically receive clients in return.

It could of course be argued that brokers place business to lenders where they have the strongest relationships – certainly if you are owned by a lender the relationship is fairly strong!!

The point is that any business using a lender should ask how independent and impartial they are. As with anything if you go in with your eyes and ears open and ask the right questions you will be ok.

It should also be said that these brokers did not reach the size they are without being successful and that success was built on good advice I have no doubt. The question could be raised as to whether they have kept control over that quality advice or not… but that is another topic..