Invoice factoring is the immediate injection of cash against value of outstanding invoices. Also known as account receivable factoring, invoices are raised up to 90% of the invoice value is released within 24 hours, the remaining 10% is paid, less a small service fee, once invoice factoring payment is received from the customer.

A factoring facility provided by the most appropriate finance company will leave you free to unlock the true potential of your business rather than spend your time juggling bills and chasing customers for outstanding invoices.

Choose the wrong finance company however, and it could have disastrous consequences on your business.

The factoring company which will best suit your business depends on a number of differing factors.

Geographic location – independents can be regionalised rather than nationalised.

Turnover – Some Factoring companies specialise in a certain turnover level.

Length of time trading.

Credit rating – Banks will only fund businesses with reasonable credit.

Number and quality of invoices.

Concentration levels – Some funders may exclude you if you have only one or two customers.

Any foreign invoices? – Some factoring companies have an international presence.

Is part of your business contractual? – There are only two factoring companies that can provide a facility.

Do you need credit insurance? – Banks and independents provide very different types of credit insurance.

Do you need an overpayment? – Certain factoring companies can provide a top up via an EFG loan.

Do you have any other borrowing facilities with your bank? – This may or may not work in your favour depending on the circumstance.

We advise;

Always see two and a maximum of three -  any more and the factoring companies won’t take you seriously.

Make sure you understand the charging structure – rmember the headline rates do not always show the full picture.

Make sure you are comfortable with the individuals involved in the business.

Make sure you know the credit limits of your top ten customers.

Don’t be afraid to ask questions and arrange a visit to their premises.

For more information please do not hesitate to call us.

It is now possible for business owners and managers to select which customers/transactions they would like to fund, collect or insure against potential bad debt!

Selective factoring offers customers the independence and flexibility that traditional factoring does not. The major benefit to businesses is that Selective factoring looks at individual transactions rather than the whole balance sheet allowing new start businesses to flourish and grow. For larger businesses  it allows them to factor individual invoices, where whole factoring is not wanted or needed. XL Business Finance has been helping businesses for over 10 years find the most appropriate business finance solutions.

Your goods are pre sold but you don’t have the working capital to purchase your goods in advance. XL Business Finance has over 10 years experience helping businesses with trade finance facilities and has a number of alternative solutions.

For one reason and another many businesses are struggling to obtain financial support from existing high street banks. This is never more true for businesses looking to import goods and products from abroad. The problem is that you have an order in the UK,  your goods have been pre sold, however you don’t have the working capital to purchase the goods in advance. Whilst banks do a certain amount of trade finance it is usually for existing and well established customers with very strong and profitable balance sheets. Banks generally will not support businesses trading for less than 3 years and very rarely will help businesses with marginal credit.

The good news is that there are a number of independent trade finance companies that may be able to assist. It will certainly be easier if your goods have been pre sold as not only will the stand alone trade  finance companies potentially help but also there are a number of factoring companies that also offer trade finance solutions. This is the preferred option for many businesses as a complete financial solution is provided form start to finish. A trade facility is provided for the business to import the goods and once an invoice has been raised in the UK upon delivery the trade finance facility is repaid via a factoring or invoice discounting facility. This factoring facility is repaid when the customer pays the invoice at a agreed future date, ie 30,60 or 90 days hence.

The Bank of England’s recent Credit Conditions Survey found that default rates on loans in Q2 increased for small businesses. By acting now, an invoice finance provider can help your business to avoid becoming part of these statistics.

In addition to trying to win new business, companies are equally concerned about whether their existing customers can pay, and on what terms.  Businesses often rely on loans and overdrafts to provide the capital they need; in recent years however, a variety of invoice finance options, such as factoring have helped SMEs to ease their funding gaps.

Not only do these arrangements have more flexibility than bank loans, but they are quicker and tailored to a company’s specific requirements. In both good and challenging markets, invoice finance can provide the flexibility and access to capital that a business needs to thrive and grow. The annual cost of a factoring facility starts as low as 1% of sales so it is a very cost effective option for business owners.

We are still living in tough times financially throughout the UK with the emphasis falling on the small business. Finance can be hard to come by for the small business owner.

Often a small business must undertake a large capital equipment investment in order to grow. The balance sheet of the business is often not strong enough to justify a Hire Purchase or Finance Lease facility.

Without capital investment the business can not grow and become more profitable. A chicken and egg scenario.

Small Business Finance is an area in which XL Business Finance has a great deal of expertise. As an independent finance broker we understand the problems of small business finance, arranging equipment leasing and machinery finance for example.

At XL Business Finance we can provide small business finance for investments from as little as £1000. This could be useful for providing tax efficient leasing for office furniture, computer equipment and telephone systems for instance.

Do not think of us as a company who provides you with a one off service to get you up and running then disappears into the night. We work along side many clients for many years providing finance solutions such as factoring, debt factoring or factoring invoice discounting facility.

As an independent factoring broker XL Business Finance can provide you with the best Business finance to meet your specific requirements.

Selective factoring enables business owners and managers the opportunity to select which  customers or transactions they would like to fund, collect and insure against a potential bad debt.

Selective factoring looks at the individual transaction rather than the whole balalnce sheet and debtor book. For smaller or new start business it enables a business to factor selective debts without the need to be tied into a 1 or 2 year contract. In difficult times this obviously helps keep costs down. For larger more established business selective factoring enables factoring of individual invoices where whole turnover factoring isnt needed or wanted.

Obvioulsy there are a number of financial institutions that offer selective factoring. We are able to find the best solution for your needs. Contact us today.

Trade finance provides the ability for business to purchase goods and stock  from within or ouside the UK. The goods can either be pre sold or unsold. Funding is available for just about any scenario however it does depend on a businesses actual circumstances. Just because a business has been declined by a high street bank it doesnt mean funding wont be available from an independent or specialist trade finance company.

For obvious reasons it is far easier to obtain funding for goods that have been pre sold and in certain circumstances 100% funding can be arranged.  XL Business finance can help you obtain the appropriate funding.

Bad debt protection can be provided on a stand alone basis or in conjunction with a factoring or invoice discounting facility. When provided with factoring or invoice discounting it is known as a non recourse facility. Bad debt protection can be provided by an independent credit insurance company or it can be provided by your bank or factoring or invoice discounting company. The idea is that you are insured if one of customers go bust. However not all insurance is the same and it is probably worth shopping around as their as some big differences between the banks, factoring companies and independent providers.

XL Business finance has been trading for over 10 years and during that time we have developed an in depth knowledge of the UK factoring market. We know at lease 20 different factoring companies each of which has their own unique selling point.

During this time we have placed deals with just over 10 different factoring companies each of which could offer a little something which their competitors couldn’t. for a example a southern based factoring company can be very different from one in the north. Not that there is a north south divide but more because we think you should be local to your particular factoring company.,

A business manufacturing prepaid telephone cards recently approached XL Business Finance needing funding for 3 single debtors all of which were based on the continent. Having been declined finance from their own high street bank they were delighted to find that a factoring and export finance facility was available via a specialist factoring company.

Although the provider was a substantial financial institution and one of Europe’s biggest banks this particular factoring company were not interested in taking on the clearing banking or doing the commercial mortgage. Therefore the business was able to carry on using their existing finance company for clearing which kept the overall banking relationship on an even keel.