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When choosing a factoring company, businesses must decide between independent factoring companies and traditional bank factors. In this blog, we will discuss four reasons why independent factoring companies are the better choice for businesses.
Invoice finance offers a wealth of benefits for businesses, yet it is often faced with scrutiny, due to the misconceptions that cast doubts on its suitability. These myths not only cloud the understanding of invoice finance but also put businesses off exploring its potential benefits. In this blog, we’ll look
Both types of facility enable a business to release cash early from funds tied up in both existing and ongoing sales ledger balances. There are, however, some key differences:- Invoice Factoring This type of facility is generally disclosed (but see Confidential Factoring below) – meaning that the factor’s involvement is
There are several reasons to use a broker to help you to select the best invoice finance product for your business:- The question should be “Why not use an Invoice Finance Broker?”
In short, Spot Factoring (the factoring of one / a selection of invoices) is relatively more expensive than a whole turnover facility. In other words, on an invoice-by invoice basis, you would expect to pay a higher amount to just fund one invoice. Much depends on the overall funding requirement
It is important that any business which uses invoice finance to fund growth obtains the highest possible prepayment against invoices that it can. However, sometimes the focus when selecting an invoice finance partner can be too much on the prepayment number – for instance “I have / am being offered
We are often asked if it is possible to factor only one or several of a company’s customers, rather than the whole ledger. One reason for this may be that some customers pay very quickly and the benefit of factoring is not as great as for slower-paying customers. The short
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
Why do invoice finance companies usually insist on a minimum monthly Service Fee? The reason is because invoice finance companies need to get a return on their investment. Service Fee is related to the level of turnover (including VAT if applicable) which is passed through the facility. In simple terms,
Construction Finance is provided by a handful invoice finance companies in the UK. It releases funding either against uncertified applications for payment, staged invoices or invoices for fully completed work. Businesses that can benefit from this type of facility are either contractors or sub-contractors in the construction industry. Such a
Most invoice finance companies will provide their own credit protection cover at a premium of sales turnover (usually between 0.4% and 1.2% of gross protected turnover).It is possible to obtain third party cover which most invoice finance companies would be happy to provide funding against. The invoice finance company would
The choice of an invoice finance partner can be time consuming and usually involves a decision between several lenders as to which is the best company to suit your needs. However, as time progresses, it is sometimes appropriate to look for a more suitable invoice finance company, for example:- Costs
The terminology used in the invoice finance world can be very confusing, particularly for those who haven’t used the service before. Essentially, there are two main elements when it comes to working out the costs of a facility:- Service Fee – is the cost of providing a facility and is
We are often asked why an invoice finance company would need directors to sign personal guarantees in support of a facility. After all, the whole reason for having a limited company is to protect the directors / shareholders from personal liability – isn’t it? Well, yes and no. We would
For new-start and growing healthcare recruitment businesses, invoice finance can be a lifeline to ensure cashflow requirements (primarily staff wage costs) can be met prior to receipt of funds from customers. It is common for local councils and healthcare companies to use Neutral Vendor platforms (such as GRI, Matrix and
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Smart Business Finance is an independent business finance broker based in Chesterfield.
