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Invoice financing contractual debt

Approach most invoice financing companies for a factoring and invoice discounting facility and as soon as they realise there is an element of contractual debt they run a mile. The good news is that there are one or two finance companies that specialise in financing contractual finance.

They are two completely different finance companies. One is a bank owned invoice financing company and the other is an independent based invoice discounting company. ie they are not bank owned. Compare any of the two quotes and you will probably find the bank owned invoice discounting company is slightly cheaper. However in our experience the bank owned finance company may not give the best service. Being a bank you will probably find they have more inexperienced staff. Not say they all are but it will be pot luck as to the level of service you obtain. The bank will probably quote a higher pre payment but as we know with any part of contractrual invoicing what you invoice isn’t necessarily what you get paid. This is where the problems start. A larger financial institution will have greater difficult reconciling payments and you end up with disallowed invoices and possibly less cash in the bank

Whilst no one funder is perfect the independent will understand that payments coming in through the door do not always match up but they have a far greater experience in reconciling the accounts. It might also be that whilst the independent quotes a lower prepayment you end up with far more cash in the bank. The independent will base their prepayment on advice from their in house quantitative surveyors and whilst a  lower prepayment might not be ideal it will also protect the directors by not exposing themselves too much from a personal point of view.

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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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