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Posts Tagged ‘Confidential factoring’

Confidential Factoring organised for sub contractor

Monday, July 1st, 2013

XL Business Finance has recently sourced a confidential factoring facility to a mechanical and electrical sub contractor.

The business had secured new contracts and the next 12 months forecasts suggested an increase in turnover to £3m up from £2m. Due to the highly contractual nature of the debt  the business could not go to their bank for an increase in overdraft  and they were also told factoring or invoice discounting was not an option. Currently there are at least 5 independent factoring companies providing contract finance and all provide a slightly different take on the facility.

XL Business Finance understands this market inside out and for any business requiring finance against applications rather than invoices we can help. Contact us today Manchester, 0161 980 0577, London 020 3301 4540

Confidential Factoring

Monday, October 22nd, 2012

Need working capital but dont want your customers knowing that you are factoring? Confidential factoring provides the best of both worlds. For businesses which are not eligible for full undisclosed invoice discounting but need some form of credit control confidential factoring could provide the perfect funding solution. The finance company will provide a dedicated credit controller phoning in your company name. This provides the funder more comfort and control and will enable them to provide the confidential facility that you require that otherwise may not have been available. XL Business Finance has been providing factoring advise and solutions for over 10 years. Call Mark  Redman on 07748 635206 to find out how we can help your business.

Confidential Factoring Explained

Thursday, May 20th, 2010

Most business understand invoice discounting and most businesses understand full factoring. However confidential factoring maybe available to businesses that require or would prefer a confidential facility.

At a time when many businesses are still struggling for cash the financial institutions have tightened up their criteria as to who qualifies for confidential invoice discounting. A business would need to be well established and have a profitable trading history. The finance company has far less control with an invoice discounting company because they are unable to verify all the invoices and as such it is potentially open to fraud via fresh air invoicing. Factoring which is just about available to any type of business providing you haven’t previously defrauded a factoring company. The factoring company is able to phone your customers to verify invoices and because they also chase payment on your behalf they have a much greater degree of control.

Confidential factoring however provides a solution that provides a compromise for the business and the funder. With confidential factoring the finance company provides the business with their own dedicated phone line and credit controller. They chase the debt in your business name and if any of your customers call for the credit controller the company will answer in your business name. Any funds collected are paid into a trust  account in your name and as such the finance company can exercise a reasonable amount of control. Hopefully this will give you the confidentiality that your business desires.

This is a relatively new product and as such anyone that has had any experience with confidential factoring we would be very interested to hear your opinions.

Confidential Factoring or Confidential invoice discounting?

Monday, January 18th, 2010

The advantages of being able to release up to 90% of your unpaid invoices is obvious however many business are still put off invoice finance not because they think there is still a stigma surrounding the facility but because their customers will not allow it. Therefore a traditional factoring facility is unacceptable because the finance company will need to verify most of your invoices. A traditional invoice discounting facility is normally only available to long established and profitable businesses. Therefore a good chunk of businesses may find themselves caught between a rock and a hard stone. The good news help is hand and XL Business finance has access to a number of finance compasnies and creative finance products that could fill a few gaps in the market.

Many businesses will not be eligible for confidential invoice discounting because they haven’t been trading long enough, turnover isn’t big enough, they are not profitable enough,  they have gone through a prepacked administration or their existing factoring company has given them notice for breach of the facilities. From the finance companies point of few confidential invoice discounting is far more risky because it is not always possible to verify the debt and is therefore more open to fraudulent activity.

However one finance company XL business Finance deals with are prepared to give customers that don’t meet the normal criteria on invoice discounting providing a facility provided there a good systems in place. From a management point of view invoice discounting is less time consuming and potentially more profitable. For the first six months or so they may run a shadow ledger to make sure the facility is being run properly.

Confidential factoring provided by a different finance company is a half way house. You will be given your own dedicated credit controller who operates in the name of your business to ensure all the invoices are collected in the normal way. You will also be your own telephone number providing all the advantages of a full factoring facility with the confidentiality certain businesses require.

 

 

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How does confidential factoring work?

Wednesday, November 25th, 2009

Confidential factoring gives a business the same benefits of a full credit control service however the facility is set up in a way that your customers will be unaware that you are factoring your debts. Businesses which have been used to invoice discounting but  have been experiencing difficult trading conditions may find that their banks are pushing them towards a full factoring service.

Invoice discounting is perceived as a more risky funding product as the finance company do not phone your customers to chase your debts. They leave it down to you and therefore you must have good credit control systems in place. In difficult times it is more likely a struggling businesses will try and put through fictitious invoices. With a factoring facility there is less chance of a fraudulent transaction because the finance company has a better control and understanding of your debts.

Confidential factoring could just be the facility that gives you the best of both worlds. It basically works by the finance company giving you a dedicated credit controller who will chase debts in your business name. Your customers are also given a unique telephone number which is answered in your name. As and when monies are collected they are paid to a trust account. By doing this the finance company maintains a far greater control on your financial matters and therefore they are at less risk. You as a customer is happy because you maintain the confidentiality which maintains your reputation and status with your customers.

At the time of writing this blog we are  aware of only one finance company that provides a confidential factoring product.  Most businesses are unaware that such a product exists and again we can use our expertise and experience to make sure you get the best possible funding solution for your business.

Confidential Factoring

Monday, October 26th, 2009

The ability to release 90% of unpaid invoices before they are due can provide a massive cash flow benefit to any business.  However for many businesses  it is important to obtain a  degree of confidentiality to maintain a good client rapport. Traditionally confidential invoice discounting would have been the chosen product however n the credit crunch and recession it is more difficult to obtain a confidential facility. Could confidential factoring be the answer to your problems?

Confidential invoice discounting  is traditionally for long established and profitable businesses with turnover over £0.5m.  A business can release up to 90% of their unpaid invoices simply by sending copies of their invoices to the finance company. The finance company is in effect trusting the business not to supply and fake invoices hence the business has to be trading well and be profitable.

Whilst traditional factoring can release cash your customers will be aware of the factoring company involvement as you will request on your invoice payment be made direct to the factoring company. This can be unacceptable for some businesses who like to keep their funding affairs private.

Confidential factoring is in effect a half way house. A trust account is set up in the name of the business where customers payments are sent to. In addition the factoring company will have a dedicated phone line in the customers name and all credit control will be made in the customers name. In this way the factoring company maintain control of the account and the customer is happy as confidentiality is maintained. This facility is particular useful for businesses which have been used to confidential invoice discounting but due to a change in circumstances no longer qualify.

Confidential Factoring

Friday, July 31st, 2009

A relatively new product to the market Confidential Factoring provides the full benefits of a normalfactoring service together with confidentiality that so many businesses would prefer. There are only a few factoring companies providing this service and as such the facility represents only a small fraction of the whole cashflow market.

A facility will provide full credit control and debt collection. The finance company provide their client with their own unique telephone number and a dedicated credit controller. All telephone calls letters and communication are made in the name of the client so your customers are unaware that a ull factoring facility is being used. Any monies collected are paid into an account in the name of the customer but operated by the particular funder. This provides the cash control that the factoring companies require which under a standard invoice discounting facility they would not obtain.

This facility is suitable for businesses that would prefer invoice discounting which is confidential but unfortunately do not meet the criteria for an invoice discounting facility. Invoice discounting is deemed to be more risky than factoring because the finance companies do not have the same degree of control. In the current economic climate factoring and invoice discounting companies are less likely to grant invoice discounting facilities, especially if the business has been trading less than 3 years or is financially week.

Factoring

Monday, March 2nd, 2009

Factoring provides a business cash against unpaid invoices. As credit control is also built into the cost of the facility it is not always easy to compare apples with apples. A high street bank or factoring company will only telephone the top few customers to chase the debt. Smaller independent finance companies more often than not add greater valuer by providing a more extensive credit control facility. Threfore  the chepest is not always the best. In addition confidential factoring provides all the benefits of factoring but in a confidential manner

 
 
 

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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