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Posts Tagged ‘invoice factoring’

invoice factoring help

Tuesday, December 29th, 2009

Invoice factoring enables a business to obtain immediate cash against its unpaid sales ledger. There are a few finance companies that can actually provide you cash within 24 hours. If you have a sales ledger of £10ok you can expect to receive an immediate cash injection of up to £90,000. The finance company uses the unpaid invoices as security and they are experts in chasing and collecting your debts. Most finance companies will provide credit for up to 90 days from the point you raise the invoice.

Invoice factoring is usually provided on a diclsed basis. Ie your customers will be ware that you are factoring your invoices as you provide the finance company bank details on your invoice so your customers will pay the proceeds into a trust account. The finance company will clear the trust account everday payng you the remaining  balance of 10-20% less any charges due.

As factoring provides credit control , in our opinion the banks do not always provide the best service. It has been said that certain well known high street banks will only chase by telephone your top 3 or 4 customers and leave the rest to be chased by phone. Therefore the debt turn as it is known can be quite lengthy. A specialist factoring company will chase by telephone every single one of your debtors and as such tend to collect the money in allot quicker. Although some of the more specialist factoring companies can be a little more expensive it is no point going for the cheaper option if you are not getting your cash in quick enough. It must be remembered that factoring is very much a value added product and you tend to get what you pay for.

XL Business Finance can help you understand the difference between the different options available and we can add value to your business by pointing you in the right direction .

non recourse invoice factoring

Friday, December 11th, 2009

Invoice factoring can release up to 90% of a businesses unpaid invoices. Choose the right finance company and it is possible to get the cash released to your bank in 24 hours. However when it comes to providing bad debt protection or a factoring facility with non recourse not all finance companies are the same. As we have mentioned in previous blogs factoring adds value to any business. It is not just about re lasing cash, it is about choosing a finance company that can provide a credit control service in a efficient manner without upsetting any of your customers in the process. The bad debt protection is exactly the same in that not all finance companies are the same therefore it is imperative that you choose the right finance company for your particular requirements.

Bad debt protection is available as an add on the factoring or invoice discounting. The level of bad debt protection will depend on the quality of your debtor book as the level of protection depend s on the credit insured limits available against each of your customers. As different finance companies use different insurance companies to provide their limits you wll get a variety of different opinions across the market place. An independent finance company will use a specialist insurance broker to get the best possible limit. A bank owned factoring company will as a rule use their own in house insurance to provide a non recourse facility. We are aware of one bank applying a £10k insurance against each of its customers debtors. This can work very well if you have alot of smaller businesses on your books. However the same bank is overall  applying quite low  funding limit against its customers. For example   we have seen a scenario whereby a customer had 10 regular customers that it factored with on a regular basis. A £10k insurance back limit was applied to each of these customers therefore in theory providing a total facility of £100k. However the overall facility was limited at £50k. So be careful as finance companies will give it to you on one hand and take it way with another!!!!!!

Invoice Factoring for a new start business

Friday, November 27th, 2009

In the current economic climate it is still just as difficult for a new start  business to obtain any sort of funding. As a general rule of thumb in order to be eligible for funding from a high street bank or finance company you must have been trading for at least 3 years, be profitable, provide a good old business plan, provide inside leg measurements and of course they will need your wife and kids as security. Hey and what about the EFG funding. Does anyone know a business who has managed to secure any EFG  funding?  The good news invoice factoring is probably the  easiest form of finance available for any new start business. And that includes asset finance of which are bloody experts!

Invoice factoring which enables a business to raise cash against unpaid invoices will provide most new start business with the ability to trade within the most difficult period of any new start business. As a business raises an invoice a factoring facility will provide up to 90% of your cash immediately. When your customer pays your invoice to your factoring company they will repay the remaining 10%  of your invoice less any charges.  As a new start business you will only be offered factoring which will also provide a full credit control service and depending on the spread of your customers you may be able to obtain non recourse factoring which will offer credit insurance. It is even relatively easy to obtain funding if you adverse credit. The best plan of action here would be to be fully open in your dealings as it is better to get all those skeletons out in one go.

XL Business can help you choose the appropriate factoring company for your business. How we guide you to the right factoring company will depend on your location, the expected turnover and the particular sector of your business. Please will free to give us a call to discuss your own requirements.

Maximise your cashflow with invoice factoring

Friday, November 20th, 2009

Once upon a time invoice factoring was condsidered the lend of last resort. There was once a stigma surrounding factoring or invoice discounting however businesses wishing to maximise their cash flow realise that there are no better options.  Any sensible finance director or managing director will know that a bank overdraft is potentially a very dangerous funding option. All overdrafts are repayable on demand and we have seen many instances recently where once very profitable businesses have had their overdrafts withdrawn because of a poor set of trading results. This can have catastrophic consequences for the business and can even have worse consequences for the directors particularly if personal assets have been lodged as security.

Factoring or invoice discounting both maximise a businesses cash flow by releasing cash against invoices you have raised but as yet have not been paid for. The security is the actual invoice and the factoring or invoice discounting company are expert in making sure that the invoices are paid in a timely and orderly fashion. Therefore any exposure as a result personal guarantees is reduced to a minimum.  Guarantees are not taken by all finance companies . It just depends on the circumstances of each particular deal.  This has got to better than using a bank overdraft!!!

Invoice Factoring For a Small Business

Sunday, November 15th, 2009

There are many forms of  products available and XL Business finance as an independent factoring company has been advising clients for many years. Whether you are looking to switch to another factoring company or you are considering using factoring for the first time XL Business Finance can provide free and impartial advice to you and your business.

Quite often we get asked to asses an existing facility and quite often we recommend that the client stays where they are. We are great believers that if it isn’t broken then don’t try to fix it. However we do believe that invoice  factoring for a small business is  very specialist market. What is the point of going to a high street bank if your turnover is only a couple of hundred thousand a year. You will be lost in a great big institution where you wont be able to speak with a decision maker and your business will be too small for anyone to care.

The good news however that there are a number of smaller independent factoring companies that specialising in serving the smaller end of the market. Their ethos is purely customer service driven and they are able to help you in a way that will seem like a breath of fresh air compared with the high street banks. These finance companies can be completely regionalized so to find out which one near you sis best for your business give us a call

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Invoice Factoring (2)

Thursday, September 10th, 2009

Invoice factoring need not only be for businesses with hundreds of thousands of turnover. XL Business Finance is helping businesses with turnover as low as £100,000 obtain finance from the most appropriate finance company.  

With a turnover as low as £100,000 it is very unlikely that a business will obtain confidential invoice discounting, however it may be possible to obtain a soft touch factoring facility. Not all finance companies will provide such a service so it is important that you take advice from a reputable and knowledgeable factoring broker.  A soft touch factoring facility will enable a business to maintain the majority of their credit control however the factoring will be provided on a disclosed basis and as such your customer will be aware of the factoring companies involvement.

If a full factoring service is required it is important that the most suitable finance company is chosen for your particular needs. Factoring provides a full credit control service and debt collection and as such it is very much a value added service.  As with any value added product you tend to get what you pay for.  The biggest comp-laint we hear about is the inability of certain financial institutions to collect money. What is the point of saving a few quid a month if you are not getting a proper service. Flexibility, a full on credit control service and the ability to pick up the phone and have a conversation with a decision maker is the key to a successful factoring relationship.

XL Business Finance is one of the UK’s top factoring specialist and has been advising clients on various financial solutions for over ten years

Invoice Factoring (1)

Monday, April 6th, 2009

Invoice factoring or account receivable factoring still continues to be very bouyant  in the finance market. Not all factoring and invoice discounting comapnies are the same. All have slightly differing lending criteria  and many add value in different key areas. A good independent finance broker will ensure the particular need of your business is matched with the most appropraite funder.