Non recourse invoice discounting
Imagine the financial flexibility of invoice discounting combined with the added benefit of bad debt protection. It is no wonder that seventy five percent of the enquiries we get are from customers wishing to insure their debts. However as with any factoring or invoice discounting, there is so many different financial institutions to choose from. XL Business Finance has been helping customers choose the most suitable funding partner for over ten years.
Non recourse is the same as bad debt protection and can be offered as an add on by most invoice discounting providers. Pricing generally starts at between 0.45% of turnover and can be high as 1%. This is addition to the normal discounting charges. As with any form of debtor finance it is important that you choose the right finance company to fund your business. It is no pointy in going for the cheapest bad debt protection if you are not getting the appropriate level of funding. An independent invoice discounting company may use a number of different credit reference agencies to set credit limits whereas a bank will use their own in house insurers. It is worth getting an independent broker to check out a few alternatives. Also beware we have seen some banks recently setting quite high individual credit limits only to take it away by capping the overall facility. Certain independent funders will also go the extra mile to get the best possible funding limits.
Independent Generally speaking 80-85% of of the value of your invoices can be released immediately. Invoice discounting can be either confidential or disclosed however the credit control remains with the business. From the finance companies point of view this facility is more risky than factoring and as such any finance company offering such a facility will carry out an audit to make sure the correct credit control systems and procedures are in place.
Tags: bad debt protection, invoice discounting, invoice discounting company