Invoice Finance can potentially provide so much more. As we know a factoring and invoice discounting facility will release up to 85% of a businesses unpaid invoices. In the very difficult period of obtaining cash flow from the banks it is important that a business obtains as much benefit from their invoice finance facility as possible. Obtaining stocking finance on the back of an invoice finance facility might provide your business with the additional working capital required to make the difference between success and failure. Not all stocking facilities are the same and XL Business finance has over 10 years experience in helping businesses find the right funding solutions.

At the moment there are no finance companies providing stand alone stocking facilities. Any stock finance is provided on the back of a factoring or invoice discounting facility. However beware there are only one or two funders that provide a true revolving stocking facility. Most invoice discounting companies suggest they provide  finance against stock however what they actually do is provide a further advance up to 100% of the debtor book using the stock as the additional security. In addition they claw back the overpayment over a 12 month period for example. A true revolving stocking facility will provide a percentage of the total stock in addition to the agreed prepayment against the debtor book.

Any business which operates in the construction industry or any business which invoices stage payments as part of a contract knows how difficult it is to obtain funding . Some banks maybe prepared to offer some form of overdraft however as soon as you mention contracts to most factoring and invoice discounting companies they will run a mile. The good news is that there two finance companies providing invoice finance against applications in the construction or any industry involved in stage payments. Depending on your own particular circumstances XL business finance will help you find the most appropriate invoice finance company.

However the two finance companies are very different indeed. One is a bank owned finance company and the other is an independent finance company. The independent company  is in our opinion the leading finance company in this sector and will fund  uncertified application. It also understands that actual payments against application maybe slightly different from the money received and it also understands that VAT and PAYE may have been deducted. In our experience finance via the bank maybe a bit hit or miss. Their  headline prepayment might be higher however they will have a very strict funding limit therefore as the business grows it might be difficult to obtain increased funding. As this is one of the big banks the level of service tends to be a bit hit or miss and not all the account managers understand contractual invoicing. If payments are slightly different they will put the cash to a suspense account because it doesn’t exactly match leading to disallowed credit limits and further reduction in funding.

I addition not all their account managers will pay against uncertified applications preferring to pay against certified invoices which can delay payment further!!!

There are so many invoice finance products and companies to choose from. A quick search on the internet will reveal hundreds of finance companies all offering similar products and services. Although invoice finance is mainly about getting cash against unpaid invoices there can be a big difference between the many different companies and how they deliver their product. To make sure you get the best factoring or invoice discounting facility for your business it is advisable that you speak with a specialist independent factoring and invoice discounting broker. A good one will know the market better than any accountant and going to your bank for financial advise will be like going to your butcher for open heart surgery.

Thankfully XL Business finance has access to twenty or more factoring and invoice discounting providers. We know the market extremely well and following a brief consultation we know exactly which provider will be best suited for your own particular requirements. We will recommended two possibly three finance companies that we believe will provide the best service for your own unique set of circumstances. The good news is that this does not cost you a penny. We will get an introductory commission from the finance company. All factoring companies pay roughly the same commission so we are not tied in one any one finance company. It would be pointless introducing a business to a finance company that wont provide the best service. The most important thing is that we get you with the right finance company and that you stay with that finance company.

There are many different factors which will influence our choice of finance company. Do you need factoring or invoice discounting, geographical location is important, turnover, number of debtors, quality of debtors, debt turn, how long your business has been established and the level of profitability are all important aspects and ill have a bearing on the right finance company.

Without a doubt we would recommend invoice finance over a bank overdraft any day of the week. There are obviously exceptions of course. Invoice finance provides 80% of your unpaid invoices as soon as you have raised your invoice. It provides a flexible approach to your working capital requirements. Obviously this wont work if you are getting cash on delivery or on the point of sale. Uner these circumstances you would need an overdraft facility to provide you with adequate working capital.

There are many advantages to invoice finance compared with a bank overdraft. Overdrafts are normally secured aginst property and are fixed at a set amount with little scope for increasing as your business grows. More importantly it should be noted that a bank overdraft is repayable on demand. If your business takes a turn for the worse potentially the overdraft can be withdrawn without notice. Unfortunately in the current economic climate we have seen happen all too often. This will never happen with an invoice finance facility.

Invoice finance can be provided by way of a number of products. Factoring in addition to providing cash against unpaid invoices provides a credit control facility. Invoice discounting can be provided on a confidential basis and as such only provides a working capital facility. Invoice discounting is suitable for more established businesses who will have their own credit control facilities in place. Different finance companies provide slight variations on these two products but in main these are the two most common invoice finance products.

A quick search on google will reveal hundreds of potential finance companies. Banks are good at invoice discounting however there are independent companies that are capable of providing an equally acceptance product. As a rule of thumb independents are better at providing factoring products. XL Business Finance can help you find the most appropriate finance company.

Whilst we are still unaware of any finance company that will provides stocking finance on a stand alone basis there is still the odd one or two factoring company that can provide a true stocking facility on the back of an invoice finance facility. By the way if anyone can provide me with details of a finance company that provides stocking finance on a stand alone basis I would love to know.

A true stocking facility is one that will provide a percentage of your stock on a revolving finance facility. Don’t be fooled by a factoring or invoice discounting company that says they do stocking finance but will only advance up to an amount equal to a one hundred percent of your debtor book. Any invoice finance company that overlends on the back of a factoring or invoice discounting facility and requires repaying over a 6 month or 12 month is not providing a true stocking facility. All they are doing i9s providing a temporary overpayment which in the long run will not improve your cash flow. 

A true stocking facility will provide revolving stock finance facility against a prearranged prepayment. Again there a few finance companies to choose from however they are all very different lenders and which one is suitable for you depends on your own particular requirements and status. I also guarantee if you approach one of these lenders direct and they cannot provide a facility they won’t tell you who the other potential funder is. No way. XL Business Finance has been providing cash flow solutions to business for over 10 years. If you have an invoice finance requirement then we will be able to point you in the right direction. Based on a quick consultation we will be able to narrow down o two or three f the most appropriate finance companies. This will save you so much time and money. This service will not cost you a penny as a factoring or invoice discounting company will pay the introducer a commission for the referral. This is in no way added to cost of the facility as they will still need to remain competitive.

The ability to raise cash against unpaid invoices is probably a more a necssity than a luxury in the current econimic climate. There are so many invoice finance  providers to choose from and it is imperative that you choose the right funding partner for your business. It is no point going with a finance company that provides a headline rate of 90% against unpaid invoices if they are very restrictive on individual credit limits and you only end up with 60% funding. XL Buusiness Finance has over 10 years experience in the factoring and invoice discounting market and can help your business find the most appropriate funding partner.

Any search on google will reveal millions of results for invoice finance. There will be banks , independent finance companies and brokers all vying for your business. An independent finance company is  an actual lender that is not bank owned,  whereas a broker is not a lender and will take a commission from the finance company for introducing you to the most appropriate funder.  During a recession it is important that you choose the right funding partner. An independent finance company will tend to be more flexible than a high street bank.  There are many independent factoring and invoice discounting companies and which one is most suitable for your business will depend on your geographic location, how long you have been trading, the quality and number of your invoices and whether you are profitable or not. If any part of your debtor book is contractual than there are only one or two finance companies which can potentially provide funding for your business.

As a rule of thumb if you need a factoring facility with full credit control we would not normally recommended a bank. The independents tend to be better at credit control and are normally better at collecting the debt. If your business is very profitable and squeaky clean then invoice discounting via the banks might be more beneficial. However for every high street bank we would be able to recommend another invoice discounting company that is bank owned but has their own autonomy.

It is now possible to obtain one off factoring against a single debtor. One finance company has entered the market whereby once you are set up with the finance company you can pick and choose which invoices you  factor.

Needless to say this facility will not work if the debtor is of a poor quality and has  a bad credit rating. Single debtor invoice finance can sit alongside other banking facilities however it wont work if  you are already factoring or invoice discounting.  A single invoice can be discounted at any point up to 90 days of it being issued. The minimum size invoice that can be discounted is £5,000 and there is  an initial  minimum charge of 5% for the first 21 days that the money  remains unpaid. Depending  on the remaining number of days the invoice remains unpaid a small amount accrues on a daily basis over and bove the initial 21 days.

This facility can be used for a one off invoice however it can also be used as as little or as often as you require. There is no on going fee just the standard charges and and when you decide to factor your invoices. The advantages of this kind of funding are obvious particularly for those businesses not wishing to be tied up for a full factoring facility. In addition if  a business finds its self using the funding more and more often then it is possible to switch to a full factoring or invoice discounting facility.

In our opinion most definitely yes!  Invoice finance will provide instantaneous cash against your unpaid invoices. The facility within reason  will grow with your business and in terms of security it is far less onerous than any bank overdraft facility.

The problem with overdrafts is that it is very difficult to get an adequate facility unless the business is very profitable or a business has a significant amount of property they can put up as security. And less face it 99% of businesses nowadays don’t fall into this category.   The other big problem with bank overdrafts is that they are repayable on demand. If you file a poor set of figures or present your bank manager with a  iffy management accounts you run the risk of having your overdraft pulled from under you. Once upon a time most people new that this was the case but had never actually heard of it happening. Unfortunately nowadays it is happening all the time. We are constantly hearing of horror stories of high street lenders being unable to renew overdraft facilities and leaving businesses in a right old pickle.

This would never happen with an invoice discounting or factoring facility. These forms of debtor finance are secured against the unpaid invoices. The facility grows with the business  and the invoice finance facility use their expertise to collect the debt on your behalf. The problem is that banks will try and persuade their customers to use their own factoring companies and in our experience these bank based lender don’t always provide the same flexibility and expertise of some of the independent companies.

XL Business Finance has over 10 years of helping and advising businesses as to which is the best funder for their specific requirements. For a totally impartial and independent view give Mark Redman a call on 07748 635 206.

A question that at XL Business Finance we are asked most frequently. Imagine the financial freedom that an invoice finance  facility will provide. Up to 90% of unpaid invoices are released by way of a cash injection into your business as and when you raise your invoices. This is a great facility which grows with your business and there are many UK based finance companies offering to help. One search on google will reveal hundreds of factoring companies.  Some are bank owned, others are independent and most are still being aggressive in terms of doing deals. How do you know which finance company is best for your particular needs. At XL Business Finance we have 15 years experience of helping and advising our clients.

Invoice Finance is basically a generic term for the many different finance options available. Factoring , invoice discounting, confidential factoring and confidential invoice discounting are all basically forms of debtor finance.   Which finance company is best for you depends on which facility you require. New start businesses, businesses with a poor set of trading results or with a relatively small turnover will only be offered a  disclosed factoring facility whereby your customers will be aware that a finance company is financing your invoices.  XL Business finance would normally recommended one of the larger independents for a factoring facilty because normally they provide a better service than a bank based factoring company. However if your business is long established and profitable and the finance company will allow you to do your credit control then in certain circumstances a bank based invoice discounting company may be more appropriate. However beware if your business trading performance takes a urn for the worst then you will be wishing you have gone with a independent who tend to be more approachable and flexible.

Invoice Finance is suitable for businesses that supply goods and service to other businesses and provide them with  with credit terms for payment. This form of cash flow finance will provide a business with up to 95% of their unpaid invoices immediately with the remainder payable to the business when your customer settles the invoice. Once upon a time Invoice Finance was deemed to be a finance product of last resort however it is fast becoming the number one choice finance product for managing a businesses cash flow.

There are various forms of funding  available however most  are a variation of the sane product. Invoice discounting , invoice finance and invoice factoring are  all basically the same products providing cash against unpaid invoices. Banks have traditionally offered  overdrafts as a working capital facility however they do not have the same flexibility and adaptability. Invoice Finance will grow with your business as the factoring companies have a close control and therefore a better understanding of the invoices you are raising. The facility grows as you grow your business.  An overdraft is traditionally agreed on the performance of the business and is often restricted by additional available security such as bricks and mortar. At some point most banks will try and force a business down the factoring or invoice discounting route however there are many independent alternatives possibly provide more funding and a much better service.