December 2009 - XL Business Finance XL Business Finance

Archive for December, 2009

Invoice factoring (3)

Thursday, December 31st, 2009

It has always been said that the biggest problem that any business will face is getting cash out of their customers. Most SME’S will go bust because of inefficient cash flow. Can a business really rely on its customers paying within the normal 30 day credit terms. Probably not. And is it really wise relying on a bank overdraft which will be capped depending on the level of security available. In addition a bank overdraft can be withdrawn at a moments notice and is potentially always repayable on demand! Invoice factoring will provide a evolving credit facility for up to 90 days against 80 – 90% of your unpaid invoices.

Invoice factoring is a form of cash flow facility which includes factoring with credit control, invoice discounting and confidential invoice discounting. An asset based invoice factoring company may also provide stock and asset based finance. These forms of cash flow products will grow with your business and provide far more working capital than any bank overdraft will be able to provide. Which type of facility is best for your particular requirements depends on how long your business has been trading, the number and the quality of your invoices, the location of your business, if you require credit control and whether your business is profitable or not!

In addition there are over 50 factoring and invoice discounting companies all offer similar products and services. By asking a few simple questions XL Business Finance can narrow the funders to two or three of the ones most suitable for funding your business. We have over 10 years of experience in helping many requirements with their own particular and unique set of circumstances. The good news is that this will not cost you a penny. Our service is absolutely free! Please feel free to give the Managing Director Mark Redman a call on 07748 635 206 to find how we can help you.

Tags: Factoring, invoice discounting, invoice factoring
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Refinance existing plant and machinery

Wednesday, December 30th, 2009

It is possible to refinance already owned plant and machinery to release cash for just about any purpose. There are only a few finance companies capable of doing such financial transactions and most of them are independently owned. It is very unusual for a high street finance company to do such transactions. They simply don’t have the expertise to carry out such transactions. It is not as simple as raising an invoice from the company to the finance company. there is faf more to it than that. XL business Finance has been trading for over ten years and is one one of the uk’s leading asset finance broker. We genuinely believe that if we cannot sort the finance than it cannot be done. To find out how refinancing existing plant and machinery can benefit your business then read on.

Most asset lenders provide funding on a similar costing which incidentally is considerably higher than any bank funding. This is because the asset based lenders will borrow money from the banks at a normal commercial rate put on a margin and lend it to businesses wishing to release some cash. These asset lenders your their experience and expertise to lend businesses money which the banks are not prepared lend. These specialist lenders know exactly how to value equipment. They will obtain valuations from professional valuers, trade dealers and use their previous experiences in particular equipment. Based on this info they will lend a percentage as what they think is the trade value. The documentation is a little more complex than a straight forward hire purchase or finance lease transaction. These finance companies also know their exit route. If a piece of kit comes back from a distressed business they know how to dispose of the kit quickly and at the best possible price. This will also protect the directors whom may have provided personal guarantees

Tags: hire purchase, refinancing existing plant and machinery
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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 .

Tags: factoring company, invoice factoring
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Invoice Financing for an SME

Wednesday, December 16th, 2009

Without a doubt there are still many options when it comes to obtaining finance against your unpaid debtor book. The ability to release up to 80% of your unpaid invoices can provide a financial life line for many businesses and can provide a viable alternative to any bank finance arrangement. Invoice financing is still an area of finance where there still seems to be many finance companies in the market for writing new business however how do you know which provider is best for your particular requirements. XLBusiness Finance has been helping many businesses obtain the most appropriate factoring and invoice discounting products based on their own unique set of personal circumstances.

Depending on whether a business requires factoring or invoice discounting we may recommend a completely different finance company. Although invoice discounting is less about providing a service the cheapest is not always the best because credit limits on individual customers and the overall funding limit must be taken into consideration. Also a bank invoice discounting company may be providing the cheapest facility however the banks are not always the best choice if your business experiences any difficulties. Factoring on the other had is all about adding value in terms of providing a credit control and efficient collection service. Banks quote cheap rates however they are not the best at collecting the cash. An independent that doesn’t necessarily have to be more expensive will provide a much better service.

In addition we will take into account your geographic location, your turnover, the quality of your debtor book, whether there is a contractual element to your invoicing, the quality of your own internal procedures and of course the size of your required funding limit. Within a few minutes of your time and asking a few of these basic questions we guarantee to narrow the most appropriate finance company to to or three. This will save you time and money and free you to get on with running your business.

Tags: Factoring, invoice discounting, invoice financing
Posted in invoice financing | No Comments »

My bank wont give me invoice discounting

Tuesday, December 15th, 2009

Invoice discounting is only one of several invoice finance products available in the market place. Invoice discounting is mainly provided on a confidential basis and as such is commonly known as confidential invoice discounting. How it works is that a customers will raise an invoice in the usual manner and post a copy to the finance company. the finance company will then make a percentage of the invoice available to the business typically 80%. All this can be viewed on line and different finance companies have slightly different systems and procedures when your customer pays you the finance company is repaid and a small fee is paid to the funder.

As invoice discounting is quite a trusting way of operating a facility and is very much open to fraud and missuse any finance company requiring an invoice discounting facility must be squeaky clean, be reasonably profitable, be very established and should have adequate systems and procedures in place. Therefore as most banks, in terms of underwriting, tend to be over cautious in the current climate and will shy away from offering such facilities. A factoring facility will give the bank more control over the ledger as payments from your customers must be made direct to the invoice discounting company.

The good news is that there are a few alternative finance companies that will take a few. Most finance companies will put a customer on factoring and if they prove themselves then after a period of time they may allow the customer to go to confidential invoice discounting. A half way house is for the finance company to leave the credit control with the client however payments are made direct to the finance company. XL Business Finance has helped a number of businesses that have been refused invoice discounting via their banks however we have been able to help by providing a funder that will give the customer a chance on invoice discounting. If it doesn’t work they will put them on factoring.

Tags: Factoring, invoice discounting, invoice finance
Posted in invoice discounting | No Comments »

Invoice Finance and stocking Finance

Monday, December 14th, 2009

Whilst we are still unaware of any finance company that will provides stocking finance on a stand alone basis there is still the odd one or two factoring company that can provide a true stocking facility on the back of an invoice finance facility. By the way if anyone can provide me with details of a finance company that provides stocking finance on a stand alone basis I would love to know.

A true stocking facility is one that will provide a percentage of your stock on a revolving finance facility. Don’t be fooled by a factoring or invoice discounting company that says they do stocking finance but will only advance up to an amount equal to a one hundred percent of your debtor book. Any invoice finance company that overlends on the back of a factoring or invoice discounting facility and requires repaying over a 6 month or 12 month is not providing a true stocking facility. All they are doing i9s providing a temporary overpayment which in the long run will not improve your cash flow.

A true stocking facility will provide revolving stock finance facility against a prearranged prepayment. Again there a few finance companies to choose from however they are all very different lenders and which one is suitable for you depends on your own particular requirements and status. I also guarantee if you approach one of these lenders direct and they cannot provide a facility they won’t tell you who the other potential funder is. No way. XL Business Finance has been providing cash flow solutions to business for over 10 years. If you have an invoice finance requirement then we will be able to point you in the right direction. Based on a quick consultation we will be able to narrow down o two or three f the most appropriate finance companies. This will save you so much time and money. This service will not cost you a penny as a factoring or invoice discounting company will pay the introducer a commission for the referral. This is in no way added to cost of the facility as they will still need to remain competitive.

Tags: invoice finance, stocking finance
Posted in Invoice Finance | No Comments »

Asset Finance leasing for a new start business

Sunday, December 13th, 2009

Arranging any kind of asset finance for a new start business can be a daunting task. It can even more difficult in the current economic climate. With very few leasing companies lending money and the ones that are left lending money can be most difficult to deal with. They are only lending money on their terms and don’t expect to be paying any cheap interest rates. The good news is that arranging hire purchase and finance lease facilities can be relatively straight forward in terms of information require by the leasing companies. We will not require elaborate business plans and cash flow projections

At XL Business Finance we have many years of arranging asset finance for our clients. Many suppliers and introducers come back to us because of our ability to arrange funding at the most competitive rates for long established and profitable companies. In addition they know that as an independent finance company we can quickly determine whether a potential new start business will be eligible for finance.

Without doubt we will be able to let you know in a five minute conversation as to whether you will be eligible or not. First with out a doubt you must be a home owner. The finance company don’t necessarily require a charge over your property. It is just that if you screw up you are more likely to do a runner if you are a tenant. If you are setting up a limited company then it is a non starter if you don’t want to provide a personal guarantee. If you are a home owner with plenty of equity in your personal property you are a far better risk. Also if you have any adverse personal credit information then it also becomes more difficult. It is imperative that if you are thinking of starting a new business don’t take your eye of your personal finances.

If you are also looking to take advantage of invoice finance such as factoring or invoice discounting this approach will also help you in your entrepreneurial adventure.

Tags: Asset Finance, invoice finance
Posted in Asset Finance | No Comments »

Is Asset Finance getting easier

Saturday, December 12th, 2009

During the last few weeks we have seen an increase in businesses requireing asset finance solutions in the form of hire purchase and finance lease. This has got to be good news for the economy however is it any easier to obtain credit approval for investments. The answer is maybe however at XL Business Finance we take a slightly different approach in organising finance for our clients. As a result our success rate is very high at getting acceptances for our clients.

Until the credit crunch there were many banks and high street finance companies wanting to your business. There was plenty of cash around and the terms and conditions were fantastic. Low interest rates, minimal deposits , long terms , no personal guarantees were all too common place. The last twelve months however have been the complete opposite. Banks as we know have shut up shop and getting funding from a finance company other than your own bank has been very difficult. Therefore to get the best possible chance of success it is absolutely imperative that your application for funding is presented to the finance company in the best possible light. XL Businesses finance are truly one of the UKs leading independent finance company, its Managing Director has over 20 years experience in the finance industry.

It is not always necessary top provide detailed business plans and cash flow projections. So long as we have the right info including a full set of the last audited accounts, recent management accounts, bank statements to evidence a well run account together with the rational for the investment you will have the best opportunity of obtaining the best possible finance deal. If there is any other information that will help such as copies of finance agreements coming to an end this will all help. Get it wrong and there is a massive difference between the prime funders and the next tier of funders if indeed you are able to get finance at all.

Tags: finance lease, hire purchase, independent factoring company
Posted in Asset Finance | No Comments »

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!!!!!!

Tags: bad debt protection, invoice factoring
Posted in Bad Debt protection / Non recourse, invoice factoring | No Comments »

Invoice discounting credit limits

Thursday, December 10th, 2009

In theory invoice discounting finance will release up to 80-90% of your total invoice book. All finance companies have eye grabbing headline rates and promise the earth when it comes to releasing cash. However the biggest problem with invoice finance and factoring is that it is very difficult to obtain funding against a client if they have a very poor credit rating. As most finance companies will tie you into a 12 month contract or even longer it is imperative that when choosing a finance partner that potential credit limits are taken into consideration. XL Business Finance has over 10 years experience in helping and advising clients choosing the the correct invoice finance company.

Different finance companies have differing policies when it comes to credit limits for invoice discounting and factoring. For example certain banks will not fund a debtor at more than 20% of your total turnover. Other financial institutions may be happy to fund a debtor no matter what the percentage of turnover. Recently we have seen one high street bank provide a £10k limit against all a businesses turnover. Not brilliant if your business is dealing with a few large businesses. However this could very useful if your businesses have many different customers and the outstanding balance is below £10,000.

What we recommend is that if you have been unhappy with your existing finance company as an independent finance company we can analyse your aged debtor report and work out what funding limits you may obtain with a variety of different finance companies. You could do this your self however you might find you are talking to the wrong companies. We can save you the time and the hassle and more importantly it wont cost you a penny. Give us a call today and find out how one of the UK’s leading independent business finance and invoice finance companies can help your business.

Tags: Factoring, invoice discounting, invoice finance
Posted in invoice factoring | No Comments »

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