Many businesses are concerned that their customers may react negatively if they decide to factor.
On the flip side, it could be argued that obtaining a finance facility with a funder should be seen as a positive due to the funder’s confidence in extending the facility.
Negative views date back to when factoring was seen as “lending of the last resort” in the seventies and eighties. More recently, and following the UK banking crisis in 2008, it has become widely accepted that financial institutions (including high-street banks) lend against assets on the balance sheet.
This means that invoice finance is becoming the norm for companies and sole traders who sell to businesses on trade terms, rather than a traditional overdraft facility.
For businesses who trade with larger “blue-chip” companies, the line of communication of the factoring company with the customer will often be with a remote finance department, rather than the customer’s usual point of contact – in other words, the development will be seamless.
For clients who really can’t get over the idea of disclosure (ie having a notice of assignment on each factored invoice), there is always the possibility of obtaining a confidential facility (either Confidential Invoice Discounting or Confidential Factoring).
In all cases we can give appropriate advice to anyone considering an invoice finance facility.
