2009 - Page 5 of 12 - XL Business Finance XL Business Finance

Archive for 2009

Asset Finance Leasing

Monday, November 9th, 2009

The last 12 months have certainly been difficult in terms of organising asset finance. Finance companies are taking are very strict approach when it comes to underwriting. Many of the bank owned high street finance companies are only lending to their own customers and some are not lending at all. Bank of Scotland and Barclays appears not to be providing any leasing deals at all and others are doing so on a restricted basis. HSBC will only provide facilities of over a £100k and Lombard are only lending to Nat West and RBS customers. Therefore thee are only a few options when it comes to hire purchase and asset finance leasing. Thankfully XL Business Finance has over 10 years experience in the market and has the means to add value to any capital expenditure product by knowing which companies are in the market and which are not.

Although there are signs that the economy is picking up we are still technically in a recession and I believe that it will be many years before we get back to how the asset finance market was before the credit crunch. It is virtually impossible to obtain funding for intangible investments unless you have a very strong balance sheet or you are prepared to pay a very high interest rate and provide personal guarantees. Therefore computers, telephone systems and any high tech equipment is even more difficult to obtain funding for in this difficult market. There are a few finance companies prepared to advance £10k per customer on this basis but it is no guarantee.

Otaining finance for what is perceived to be machinery and equipment which you may think has good value for security purposes can also prove difficult. Unless you can get finance from a high street funder which look at the strength of your balance sheet you might be caught between a rock and a heard stone. More on this later.

Tags: asset finance leasing
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Invoice Discounting

Thursday, November 5th, 2009

Invoice discounting is a form of invoice finance providing the financial freedom to grow your business. This form of discounting is usually provided on a confidential basis meaning your customers are unaware that you are using a invoice discounting company. As such the invoice discounting provides a flexible form of finance enabling a business to release 90% of their unpaid invoices. Recently XL Business Finance has been advising a number of business with turnover in excess of 20m that have been disillusioned with inflexible high street banking institutions. The good news is that there are a number of specialist lesser known banks specialising in businesses with larger turnover. There are not many institutions capable of handling such large corporate businesses but we have the expertise to matchyou with the most suitable funder.

XL Business Finance regularly introduce invoice discounting to two or three finance companies some of which are foreign owned. These funders have been established with the sole purpose of specialising in the UK invoice discounting market. I guarantee you probably haven’t heard of these finance companies however their personnel are of he highest quality and have the ability to structure the most complex of deals. All of our customers have been highly impressed with our recommendations.

Tags: invoice discounting, invoice finance
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Refinance existing plant and machinery

Wednesday, November 4th, 2009

The ability to release cash from the equity in existing plant and machinery is providing a life line for many UK based businesses. Cash can be released for just about any purpose and so long as there is some value in your equipment a deal can be done for just about any type of company irrelevant of its trading performance.

It is even possible to release cash even if your existing finance agreements have not reached the end of their term. Providing you have a copy of your finance agreement XL Business Finance will be able to do a rough calculation of your settlement figure. If you can also provide a list of your equipment we can obtain a rough valuation for refinancing purposes. As a minimum we will need age , make and model of the equipment you wish to refinance. There re a number of potential finance companies that are able to refinance existing plant and machinery and all use slightly different methods to value the kit for refinancing purposes. Remember that this is a very specialist market asset refinnace and that any valuations are obtained on a worse case basis or forced sale basis. XL Business Finance has the expertise to approach the finance that will provide the best valuation for your particular equipment. One finance company may be strong in the construction market for example whereas other finance companies might be good at printing equipment. We guarantee we get you speaking to the most appropriate funder for the type of equipment to be refinanced and for your particular circumstances.

Tags: refinance existing plant and machinery
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Invoice finance

Wednesday, November 4th, 2009

Invoice Finance is still the fastest growng commercial financial product available. The ability to release cash against unpaid invoices can provide the financial freedom which the traditional banking products so often fails to deliver. The good news is that there are still many finance companies offering invoice finance and as such it is relatively easy to obtain funding. Which finance company is best for you depends on the your particular circumstances. XL Business Finance has experience in organising invoice finance for businesses turning over £70k to big PLC companies with turnover in excess of £30m. We have the expertise and knowledge to help guide you through the manydifferent options and match you with the most appropriate finance company.

As with any type of finance high street banks try to be all things to all men and in reality don’t often do the job as well as an independent finance company. An independent invoice finance company is not bank owned and obtains funding from private and independent sources. Therefore an independent invoice finance company tends to be a little bit more flexible and approachable than a high street finance company. However there are certain high street banks that are particularly good in niche areas. For example one high street bank is very good at doing international trade finance whereas another high street bank is very good at doing construction invoice finance. The point is that a good independent factoring broker can save a business time and money by recommending the most appropriate finance company.

Obviously there is other criteria which we take into consideration. The geographic location can be important but not paramount. Te length of time the business has been trading. The profitability of the business. The quality of the debtor book to be funded and whether there is any adverse credit all need to be taken into consideration. And the good part is that our service is totally free of charge. It doesn’t cots you a penny to be put in touch with the most appropriate invoice finance company.

Tags: independent factoring boker, invoice finance
Posted in Invoice Finance | No Comments »

Leasing plant and machinery

Monday, November 2nd, 2009

As an independent finance company we are certainly busier than we have been for the last 12 month. The level of enquiries and business written during September and November has been back to pre recession levels. Wether this remains at this level remains to be seen but there are certainly some encouraging signs. Hopefully we have finally turned the corner however we envisage it will be many months and possibly years before the financial institutions and banks start freeing up their lending criteria.

This time 12 months ago we were seeing many businesses putting plans on hold and unwilling to commit to any capital expenditure projects. And who can blame them not knowing the severity and duration of the forthcoming recession. Now 12 months on and I think the general consensus of opinion is that whilst things are not great they probably are not going to get any worse. Therefore if a business can make their plans and plant and machinery investments work in the current climate there is an attitude of lets crack on with it because when business really picks up we will be well placed to reap the rewards.

Although we are hopefully out of the recession banks and finance companies will remain to be tight for months and even years to come. Combined with the lack of liquidity in the finance markets it will be still remain difficult to arrange hire purchase and leasing facilities for the foreseeable future. There are few leasing companies actively lending and many of the banks are looking after their own customers and only the good ones at that. Fortunately there are still a few funders still lending money and a good independent finance broker will be able to source the most appropriate funding. It is most important that all the correct financial information is presented to the appropriate finance company to ensure the best chance of success. This is where XL Business Finance has many years of experience and expertise and we will endeavor to make sure your finance needs are fullfilled.

Tags: hire purchase, independent finance companies
Posted in Asset Finance | No Comments »

Factoring Company

Thursday, October 29th, 2009

Factoring is simply the means of releasing cash against unpaid invoices and providing the financial freedom to grow your business. Any search of the internet will show hundreds of businesses offering factoring services. So how do you know which one to choose and which ones to avoid? Factoring is not just about providing cash and financial freedom, it is very much about adding value. Credit control is a very important part of the sevice and differnt finance companies are better at it than others. XL Business finance is an independent finance company and has provided impartial advice to many happy clients as to which factoring company will best suit their particular needs.

Factoring can be provided by banks and independent finance companies. The banks factoring service tends to be less personal than a independent factoring company. With a small independent factoring tends to be their core business and as such you are never more than a call away from a decision maker. Therefore an independent can sometimes provide a more hands approach particularly if there have been any trading issues along the way. It is also worth considering factoring provides a credit control service so it is worth discussing how differnt finance companies perform in this area. Banks tend to chase the top few customers by telephone and the rest by letter. Not such a good idea in view of the current post strikes. Certain independent factoring companies chase all their customers by phone. The service fee may be slightly more expensive however as one customer said to us recently ” we should have gone with a smaller more flexible but slightly more expensive factoring company and had more cash in the bank to use for working capital.”

Another consideration is your geographic location as the independents tend to regionalised and such some are stronger than others in certain areas. It is also worth noting that some bank owned factoring companies have their credit control and customer account managers and payment centres in different parts of the country. It is worth discussing these issues with an experienced factoring broker!!!

Tags: Factoring, independent finance company
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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.

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

Factoring in a Prepack

Thursday, October 22nd, 2009

In the current economic climate we are faced with the unfortunate fact that many struggling businesses will be forced to go through a pre planned administration or pre pack. In doing so a business may have a fresh start and typically the victims will be the crown , financial institutions and unfortunately some creditors and members of staff. It is a harsh reality of the recession but in our opinion it is better that a business be given a second chance to continue trading rather than the business folding completely. However any business going through a prepackaged administration will have fewer funding options.

Unfortunately most of the high street banks will not finance a prepack or phoenix company. Therefore many businesses are left wondering what finance options are available. There are only a handful of commercial mortgage options available and good luck with any business trying novate hire purchase or finance lease agreements into a new co. XL Business Finance has the expertise and experience in helping phoenix businesses with their asset finance agreements. On a more positive note there is a plethora of factoring companies, usually independent from the high street banks that are willing and able to fund your debtor book.

However the options in terms of products will be fewer and no factoring company will offer a confidential invoice discounting facilities. The options will be factoring facility with full credit control, a factoring whereby the customer can do the credit control themselves and in certain circumstances it may be possible to obtain a confidential factoring facility. To find out which product will be best suit your particular requirements and which factoring company will delver the best service XL Business Finance has over 10 years of advising and helping many satisfied customers.

Tags: Factoring
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Switching Factoring Company

Wednesday, October 21st, 2009

The ability to release cash against unpaid invoices undoubtedly can have a positive impact on the cash flow of a business. The extra cash can provide the freedom to grow the business and the added value of having someone chase your debts will also provide a massive bonus and a boost to the business. Typically a factoring facility can release up to 90% of your unpaid invoices with the added benefit of credit control. However if things are not working out how easy or difficult is it to switch factoring companies?

There are so many factoring companies to choose from and not all factoring companies are the same. Some are bank owned, some are independent PLCs and some are small private companies. Which is the best factoring company for you will depend on the turnover, the length of time you have been trading and the profitability for your business. In addition factoring is very much a value added service. Factoring can provide credit control on the back of the funding your invoices. As such there are two elements to the charging. An interest rate at around 1-3 over bank base rate is applied to the money you borrow and there is a service fee for the credit control. For the smaller business this starts at a couple of hundrded pounds per month. The cost of using a factoring company for credit control can be very cost effective compared with the cost of employing a full time credit controller.

However as factoring is not as simple as just borrowing money there are occasions when the relationship between the factoring company and business breaks down to the point that the customer has no option but to seek a new factor. The most difficult part of changing factoring companies is that the charges can be onerous especially if a new contract has been signed. Sometimes with some careful negotiation these amounts can be reduced however it is best timing any move to coincide with the expiry of any contract. It is not unusual for factoring companies to have a 3 months notice period so this must be taken into consideration as well. In addition if you factor with the bank and they have a overdraft as well as a factoring facility the overdraft maybe withdrawn if they are loosing the factoring. A good independent factoring broker may be able to add some value in any transfer as many of us know many of he funders very well and sometimes we can have some influence over the exiting factoring company.

Tags: Factoring, independent factoring broker
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Financing Equipment from a Foreign Supplier

Tuesday, October 20th, 2009

Financing eequipment from a foreign supplier might not be as straightforward as one would think. Strangely however the larger the transaction the easier it is. Different finance companies have different views of what can and cannot be done so it is worth speaking with a good independent finance broker that can guide you though the various options.

There are only a few finance companies that can help with hire purchase or the finance lease of equipment from a foreign supplier. It is always worth trying to get the finance in place well in advance of you actually requiring the facility. As most finance companies will agree a facility for a max of 90 days it is best working out your options no more than three months in advance.

There are two ways of funding equipment in this way. The first is for the customer to purchase the equipment from the foreign supplier. They will have entered into an agency agreement authorising the customer to purchase the quipment on behalf of the finance company. In the terms of the agency agreement it will have been agreed that the finance company will then provide a finance lease agreement or a hire purchase agreement to the customer. Certain finance companies will will only transact these agreements at a certain level because of the amount of paperwork involved. The other disadvantage is that the customer must be expected to pay for the goods up front. Sometimes if the foreign based supplier requires paying in advance then this can be the only way to finance plant and machinery supplied by foreign suppliers.

If there is a good relationship with the foreign supplier you may still have to enter into an agency agreement however it may be possible for the finance company to pay the foreign supplier direct. For this to happen the goods must have landed on the UK so the finance company can inspect the goods. It may even be possible to structure a deal so no VAT is paid to the finance company. This only works with non UK invoices. Give us a call to find out!

Tags: equipment finance, independent finance broker
Posted in Asset Finance | No Comments »

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