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Credit limits for factoring finance

One of the biggest issues facing small businesses in the current financial climate isthe lack of funding against certain customers. It is all well and good obtaining a factoring facility with a headline 95% prepayment if the finance company restricts funding against certain customers. Unfortunately many businesses will place that invoice finance with a factoring company promising the earth however if you are not careful you will end up with a finance company that potentially will not deliver.

When choosing a factoring comapny it is well worth asking the potential funder what credit limits they will place against your top ten customes. You will be surprised how this will vary across the number of available factoring companies. XL Business Finance has ten years experience of helping businesses choosing the right finance company and as such we can add value to your business by doing all the hard work.

In addition it is worth considering the overall credit limit. A bank owned factoring company although may offer a cheaper facility they are less likely to increase the overall funding limit as quick as an independent factoring company. Therefore as the turnover of the business increases you may find that funding is restricted. A potential customer told us recently that he wished he had chosen a more flexible bur only slightly more expensive independent company rather than the slightly cheaper less flexible bank based factorig company. A change of factoring company resulted in a much increased availability and more cash which massively helped the cash flow and performance of the business.

As discussed in previous blogs there are many criteria we will consider when choosing the right finance comapny. Size, location, quality of the debtor book, profitability, length of time established and market sectoir are all important factors.

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XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

XL Business Finance, Eaton Place Business Centre, 114 Washway Road, Sale, Cheshire M33 7RF UK.

 

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