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Posts Tagged ‘cash flow finance’

Directors Liability for unpaid PAYE/NIC

Thursday, September 6th, 2012

Directors of companies that use HMRC as one of their bankers should take note of a recent tribunal known as ” Roberts”, about their potential personal liability for unpaid PAYE /NIC contributions

In short the finance director was served with a personal liability notice for PAYE and NIC which were deducted from wages but not paid. More details available if required. This need not happen with the correct advice and funding possibilities. There are many alternative business finance  to bank funding such as flexible invoice finance, EFG funding asset refinance and sale and lease back of intangible assets using directors pension pots.

XL Business Finance has been providing alternative funding solutions for over 12 years

 

Can Asset Based Lending provide an alternative to high street banks?

Monday, September 5th, 2011

A traditional Asset Based Lender  or ABL predominantly provides  cash flow finance. The main facility they offer will be invoice  invoice discounting however they can also  provide stocking finance, plant and machinery  finance/refinance and for the right customers commercial mortgages as well. Although the banks serve a purpose for many businesses the amount of facilities that are available are often dictated by the size of the balance sheet and and previous years trading performance. Therefore the level of available funding isn’t necessarily related to the amount of available security. How many times  have you heard a business owner say that the bank has plenty of available security but the bank will not increase their facilities

ABL lenders look at things in a slightly different perspective. Whilst it is important that they buy into the business and are comfortable with its trading performance they are mainly concerned with the available level of security. An invoice discounting facility will provide funding of circa 85% of the unpaid debtors. They will also consider providing additional working capital secured against plant and machinery. They will lend anything up to 80% of its value depending on the circumstances around the deal. A true revolving stocking facility may also be appropriate and potentially commercial mortgage funding is also available. In addition an ABL lender is not necessarily after the clearing banking and as such you will be able to leave your clearing with your existing high street. This potentially makes for an easy transition to potentially more flexible and supportive funding arrangements.

 

 

How to transfer existing leasing agreements in event of an administartion

Wednesday, May 12th, 2010

Love or hate them pe organised administrations or prepacks are an inevitable part of the economy today. In theory they sound great. Dump the old company together with all the old debt ( mainly crown arrears) , buy the business back off the administrator and start a fresh with a new meaner and leaner phoenix company. It has been well documented that obtaining  cash flow finance such as factoring or invoice discounting can be relatively straight forward however it may not be so simple in transferring existing hie purchase and leasing facilities from the old co into the new co.

How easy or difficult this may be depends upon the finance company involved and whether it is a finance lease or hire purchase facility. In the event of an administration if the equipment in question is on a hire purchase facility than the administrator has the right to any equity in the agreement and may take this into consideration when negotiating a purchase price for the business. If the agreement is subject to a finance lease then control of the agreement rests with the finance company. In theory the finance company can terminate the agreement, repossess the kit and sell the equipment and pocket any profit. Thankfully this doesn’t happen very often but none the less it is something that could happen.

It would therefore seem allot simpler if the agreements could be transferred or novated into the new co. Unfortunately many of the high street finance companies will not simply transfer the agreement into the new co. They have a policy of not supporting phoenix companies. There are one or two that do but they underwrite the new co as if it were a new deal so there is no guarantee. If they don’t like what they see they will provide a settlement figure and give the  business the opportunity to finance the kit elsewhere. Some of the specialist funders do not have an issue in transferring the agreement into a new co. Beware some will transfer the agreement like for like whereas others will charge full outstanding rentals and then roll this into a new co.

Cash Flow Finance

Tuesday, September 22nd, 2009

Cash Flow Finance covers so many financial products and provides the ability for the business to raise additional working capital. Factoring and invoice discounting are the two obvious and well known products however stocking finance, trade finance, payroll finance and even refinancing existing eequipment can provide much needed working capital.

Stocking finance is usually bolted into the back of an invoice discounting facility and can provide much needed additional cash. Trade finance is offered by most high street banks however some of the larger independents are pretty good at this facility. Trade finance provides a customer with working capital against pre ordered goods enabling them to purchase stock from their supplier. Trade finance can either be UK based or if a customer is importing goods then we are looking at International Trade Finance. Simple!

Currently no one is offering payroll finance however it is rumoured that a new funder will soon be entering the market so watch this space.

Refinancing existing eeequipment is increasing becoming more difficult  as residuals values of equipment take a pounding in the current recession. However if there is equity in the equipment or machinery this can be released to provide much needed working capital. The equipment or machinery that is to be refinanced need not be free of finance as it may be possible to repay the existing funder, reduce the monthly payment and also release some cash back into the business. Happy days!

Cash Flow Finance

Friday, February 27th, 2009

Cash Flow Finance is the most raidly expanding form of finance and their are many funders positively active even in the current market. Whether it is factoring, invoice discounting or payroll finance these different  finance companies all have different areas of expertise. For example international trade finance is only undertaken well by 3 or 4  companies. Like wise stocking finance is provided by only 2/3 companies. Choosing the right company for your business can be made easier by speaking to a good independent broker.

Stocking Finance

Monday, January 26th, 2009

It appears businesses are increasinlg looking for additional means of funding working capital other than the their bank overdraft. Stocking finance is a viable addition to taditional cash flow finance facilities. Stocking finance is usually provided in conjunction with a factoring or invoice discounting facility. Not all factoring or invoice discounting companies povide a true stocking facility. All say they do but most only provide funds against stock to provide an over advance of equal to and no more than the total debtor book. Furthermore they wil reduce the advance over an agreed period back to the agreed payment of the debtor book. IE 85-90%. There are only a handful of true revolving stock facilities where an agreeed percentage of the stock is permanently advanced on a revolving credit basis. Remember this facility must be used in conjunction with the factoring or invoice discounting facility.

 
 
 

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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