On the basis that most scaffolding companies are working to contract many such businesses wrongly assume that they are not eligible  for a factoring or invoice discounting company. The good news is that one or two invoice finance companies will provide a factoring service.

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Any search on the world wide web will reveal numerous factoring and invoice discounting companies. Some of them will be actual lenders, others will call themselves “independent” in that they are not bank owned but they are still a lender and some ae brokers. In our opinion using an invoice finance broker will save you the most time and help you obtain the most appropriate funder for your particular requirements.

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As you will gather if you care to read through any of blogs that this is a favourite subject of mine. And for good reason too. We have seen a number of what looked like very strong businesses fall foul to the banks in terms of having too many eggs in one basket. Although the banks will never publicly admit there appears still to be a tendency to call in their security if they think they have half a chance of clearing their debt. A bank that has a debenture over the business can appoint an administrator at any point they wish to do so. And how do they obtain a debenture. well you would normally give it when you take out an overdraft. Just one of those documents that they slip under your nose when signing all the other paperwork. Overdrafts are always repayable on demand and for this reason we believe that any form of invoice finance is a far better alternative.

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Invoice Finance is the means of obtaining cash against unpaid invoices. More and more debtors or customers require up to ninety days credit terms in order to pay for their goods and services. Invoice finance provides up to 80% of these invoices immediately providing a valuable working capital facility.

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We had a request yesterday from a web development company wanting some form of  invoice finance. They had aboiut fifty customers on twelve month contracts all of which paid a ten percent deposit on the work to be done and then on a monthly basis thereafter. They were invoicing at the beginning of each month for the work to be carried out for the following month. Invoice financing only works for work that has already been carried out and that is being invoiced with credit terms of thirty, sixty or ninety days. Although we were not able to help we put this enquirer in touch with a company that can offer contract finance , a totally different product.

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A quick search of the internet will reveal thousand of results for any invoice finance or factoring product. To work out which finance companies you should be contacting it may worth explaining the difference between the different results that you will find on the internet.

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Obtaining business finance for a new start business is most difficult at the best of times. In the current economic climate it is even more difficult especially if you approach your local high street bank for funding. Anyone who has had the pleasure will realise  that many banks promise the earth and after providing expensive business plans, cash flow projections and numerous meetings deliver very little. And more likely than not if they can do something they will want to take a charge over property and the wife and kids. The good news however is that XL Business Finance has been helping many new start businesses obtain various forms of finance.

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At a time when it is becoming more and more difficult to obtain working capital through traditional banking facilities many businesses are looking to alternative and possibly more flexible form of finance. Invoice finance combined with stocking finance is an asset based finance product that can provide additional working capital over and above traditional invoice discounting and factoring facilities.

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One of the most common difficulties currently facing many businesses is that creditors are trying to shorten their credit terms. In extreme circumstances we are seeing many credit terms being completely removed. Suppliers are wary of providing credit on the basis that they probably have had their fingers burnt due to the vast number of businesses going into administration. This doesn’t help the business which are left particularly when it appears they themselves are struggling to get cash out of their own customers. Banks are being very difficult when it comes to increasing overdraft limits  therefore in order to obtain sufficient working capital many business are turning to more flexible forms of invoice finance. Additional working capital is also being obtained by refinancing existing capital equipment.

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Many business believe that they are not eligible for an invoice finance product because they have a poor trading history. This will almost certainly be the case if you require an invoice discounting facility. This might also be true if you approach a high street bank for either invoice discounting or factoring. The good news  is that even if your bank has knocked you back for a factoring facility there are many independent factoring companies specialising in this area and they are able to take a more flexible approach to helping a business.

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