Running a busines is a challenge at the best of times and keeping cash flowing and paying suppliers and staff is a constant juggling act. This has never been more relevant than in the current economic climate where raw materials , energy and fuel costs and a squeeze on credit are putting pressure on business owners.

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Non Recourse Factoring provides a certain amount of bad debt protection. In addition to providing cash up 85% of the customers unpaid invoices, bad debt protection is provided against unpaid invoices. However there are two very different schemes run by bank owned factoring and independent factoring companies. Banks can provided blanket cover with their bank owned innsurance scheme. Independents provide insurance offered by 3rd party companies. This is usually provided at a cheaper rate than the customer would get if they went direct to the insurance company themselves. Both schemes have their pros and cons.

The Enterprise Finance Guarante (EFG) replaced the Small Firms Loan Guarantee Scheme (SFLG)  in January 2009. The new scheme makes loans available up to £1.0m and in theory is more flexible than the old scheme. A 30% contribution is required from the customer and the loan is suitable for businesses which have been declined due to lack of security, previously been ineligble for SFLG or have been unable to get finace via other types of products.

Factoring provides a business cash against unpaid invoices. As credit control is also built into the cost of the facility it is not always easy to compare apples with apples. A high street bank or factoring company will only telephone the top few customers to chase the debt. Smaller independent finance companies more often than not add greater valuer by providing a more extensive credit control facility. Threfore  the chepest is not always the best. In addition confidential factoring provides all the benefits of factoring but in a confidential manner