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Independent or Bank Owned Factoring Company

There are many factors which need to be taken into consideration when choosing a new factoring company. The most important of which is whether an independent factoring company or a bank owned factoring company is the preffered route. An independent company which is non bank owned traditionally tend to be more flexible than banks.  Independents don’t have the same financial constraints as the banks as they are able to make their own rules and regulations. In addition many of the sales guys working for independents are very senior and experienced and are able to agree deals instantly up to a certain size. This potential quick turnaround in the decision making process can also is a factor in choosing a funder.

As a rule of thumb we would recommend an independent for a full factoring facility.  It is more likely that an independent will chase your customers more frequently. Some banks will only phone the top few customers. Certain independents will chase the entire customer base. Obviously this will have an implication on cost and is the reason why it may appear cheaper to use factoring with a bank. However it must be remembered that factoring is a value added service and the cheapest is not always the best.

However if you are looking for a straight forward invoice discounting it is sometimes difficult to argue that the independents are better than the banks. At this point other factors also need to be taken into consideration. The length of time the business has been trading, is it a new start , is there any contractual  element to the debt, is any international trade finance required, is their additional stocking finance required etc etc

 

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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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