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Commercial Mortages UK

In the current environment of banks being difficult in terms of providing new funding it might be worth mentioning another reason why a business should use another invoice discounting company other than their own bank particularly where a commercial mortgage is involved.

When a bank has got too much of a handle of a businesses finances and their is a requirement for additional funding, due to the overall exposure it might be difficult to obtain the required additional working capital. In extreme cases the banks may view this as a signal that the business is in difficulty and pull in some investigative accountants. In our opinion all banks are interested in is covering their own position and have little desire to help a business trade thorough any difficulties.

Unfortunately it is not straight forward to switch from one invoice discounting company to another invoice discounting company when a commercial mortgage is involved. One would think that a commercial mortgage is a stand alone facility which really it should be. However as soon as invoice discounting is taken out a all assets debenture will be registered against the business which will also include the property as well as plant and machinery

We have seen a few instances where the bank have in principle agreed to let the invoice discounting business go but in reality it has taken months and months to do the transfer because of  the incumbent bank wont realise the book debt from the debenture. In reality a deed of priority will be required in complicated cases however these can take forever and a day and as we know dealing with the banks legal departments can be like pulling teeth,

The best way forward is always to keep different finance products separate from different finance products and as such you will never find yourself in the mercy of one bank.

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