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Archive for March, 2010

Using a broker to refinance capital equipment

Wednesday, March 31st, 2010

We totally understand the need to get the best possible deal on any business finance agreement. It is no different whenit comes to raising cash against unencumbered plant and machinery. No doubt any business wishing to refinance plant and machinery will go to their banks first . When they realise that this is an area of finance the banks cannot help with they will probably search the internet for inappropriate solutions. Any search of google will reveal hundreds of companies offering cash against unencumbered assets. The problem is that most of these will be brokers and when it comes to refinancing existing machines and equipment having too many brokers involved can have a detrimental affect on your credit aapplication

We have seen one deal recently where up to eight brokers have introduced the same the deal to one finance company. And the worrying thing was that some of these introducers were in fact mortgage brokers with no experience in the asset finance market. At the end of the day there are probably only half a dozen lenders in this market so all paths lead to the same funder. If a finance company starts to get the same deal from many different sources they will not take the deal seriously because they will know the deal is being touted around the market. They have nothing to loose by providing onerous terms and conditions and their approach will be very much take it or leave it offer.

At XL Business Finance we have over 10 years experience in providing equipment refinance solutions. We do things slightly differently. Firstly we know all the plant and machinery valuers which the different finance companies use. We wll go iect to these valuers and get an idea of the level of security in the deal. We then provide a realistic opinion as to the amount of cash that can be raised against the kit in questions. We will then provide a proposal to the most appropriate funder having already dome our homework on the kit. A clean and realistic application will have a much greater chance of success.!!

Commercial Mortages UK

Monday, March 29th, 2010

In the current environment of banks being difficult in terms of providing new funding it might be worth mentioning another reason why a business should use another invoice discounting company other than their own bank particularly where a commercial mortgage is involved.

When a bank has got too much of a handle of a businesses finances and their is a requirement for additional funding, due to the overall exposure it might be difficult to obtain the required additional working capital. In extreme cases the banks may view this as a signal that the business is in difficulty and pull in some investigative accountants. In our opinion all banks are interested in is covering their own position and have little desire to help a business trade thorough any difficulties.

Unfortunately it is not straight forward to switch from one invoice discounting company to another invoice discounting company when a commercial mortgage is involved. One would think that a commercial mortgage is a stand alone facility which really it should be. However as soon as invoice discounting is taken out a all assets debenture will be registered against the business which will also include the property as well as plant and machinery

We have seen a few instances where the bank have in principle agreed to let the invoice discounting business go but in reality it has taken months and months to do the transfer because of  the incumbent bank wont realise the book debt from the debenture. In reality a deed of priority will be required in complicated cases however these can take forever and a day and as we know dealing with the banks legal departments can be like pulling teeth,

The best way forward is always to keep different finance products separate from different finance products and as such you will never find yourself in the mercy of one bank.

Why use an invoice financing broker?

Wednesday, March 24th, 2010

Any search of google will reveal hundreds of choices of invoice financing companies. There are three main types of companies. Independent brokers, bank owned invoice finance companies and independent factoring and invoice discounting companies. Independent brokers are a good place to start. Not to be confused with an independent factoring or invoice discounting company that provide the funding and service themselves but are independent in that they not bank owned.

A good independent broker will know the factoring and invoice discounting market inside out. Based on your businesses particular circumstances such as length of time trading, location , profitability, turnover and quality of debtor book he or she will be able to narrow the choice of factoring companies down to about two or three of the most suitable funders. Different lenders have different lending criteria and most have different sweet spots. What is one mans poison is another mans whatsit. We would always recommend having a meeting with a max of two to three providers so you can a feel for personalities and decide which finance company that you may be able to work more closely with.

We would also be wary of a site that links in to a number of different funders to provide the cheapest possible quotation. There are so many factors which need to be taken into consideration when choosing your funding partner. Although cost is certainly important it shouldn’t be the be all and end all as there are so many other consideration which should be considered.

XL Business Finance is one of the leading indpendent brokers in this firld and without a doubt will certainly be able to add value to the proceedings.

Specialist Lending Units

Wednesday, March 24th, 2010

Recently we have had a number of enquiries from businesses that need help and advice because they have ended up in a banks specialist lending or intensive care unit. If a business has had a dip in performance thee banks take the opportunity to move the business to this specialist division of the bank. Whilst the business does not need to be a basket case the cynical amongst us might think that the banks are taking the opportunity to slap a load of unnecessary charges onto their customer. Any business having such an experience will know all too well that they use this as an opportunity to increase interest rates and charge monthly management fees. In deed many businesses don’t ever come out and allot will end up going into administration. If ever there was a case for not having too many eggs in ones basket!

For many years we have been advising customers not to have the same clearing bank  which  they use for invoice discounting or factoring and if at all possible to use a total separate financial institution for any commercial mortgages. Any business which has adopted this three pronged approach to banking and business finance will find themselves protected from the uncertainty of been exposed too much with one financial institution.

Any business finding themselves at the mercy at the banks can look at alternatives. They are out there and we know how to handle the banks. We have over 10 years experience in dealing in such matters and we will certainly be able to help and add value to your business.

Financing Imported Goods

Friday, March 19th, 2010

Many businesses are seeking finance to enable them to import goods from foreign countries. Providing that the goods have been pre sold in this country it may be possible to get funding from start to finish by way of an international trade finance facility dove tailing against a factoring or invoice discounting facility.

Many of the high street banks will provide funding enabling business to import goods however many banks will provide a line of credit against the strength of the business in terms of profitability, strength of the balance sheet and the length of time the business has been trading. You must also bank with that particular banking institution and more often than not security such as charges against property etc is often required. Therefore as with most high street banks they can only provide funding for the customers with the best possible credit score.

This leaves a big gap in the market for businesses unable to obtain funding from the banks. Thankfully there are a number of independent based finance companies that are able to provide funding against the strength of your orders and documentation. Therefore funding is potentially available for new start businesses, companies that have declined by their banks or businesses with less than positive trading performances. Providing there is value in the goods that you are buying a trade facility will be provided for you to import your widgets etc and providing the goods have been presold a factoring o  invoice discounting facility will dove tail and be used to repay the trade facility on delivery of your goods to your customer. Simple! Well in theory it is

Factoring and EFG funding

Thursday, March 18th, 2010

It is most commonly believed that the only way to obtain EFG funding is via the banks. On the basis that two high street banks have written nearly 80% of all EFG funding it is easy to understand why. However it is not commonly known that it is possible to obtain EFG funding on the back of a factoring or invoice financing agreement. This may prove very beneficial because the banks can be difficult to obtain funding even when the additional security of the EFG guarantee is available.

There is a misconception that because an EFG guarantee is available from the government  that funding will automatically be approved. This sadly is not the case. Any application for business finance via the banks  must firstly meet with that particular banks strict lending criteria. Providing that the application ticks all the boxes in terms of meeting the bank criteria and the only reason the bank can not  do it is because of lack of tangible security then this where the EFG loan guarantee scheme will kick in. So if the application is a basket case it wont get passed the first hurdle.

Therefore if your application for EFG funding has been unsuccessful via the banks it may be worth looking at efg funding via a factoring or invoice discounting facility. Independent factoring and invoice discounting companies tend to be more flexible than the banks so you have absolutely nothing to loose.

Obtaining Lease Finance for digital printing equipment

Tuesday, March 16th, 2010

There seems to be a trend for businesses to be investing in digital print technology. We are seeing many traditional litho businesses investing in digital equipment which will enable them to produce high quality short run work at a competitive price. We are also seeing many businesses bringing their print requirements  in house and investing in digital printing equipment which seems to have come of age in terms of quality and cost. For many businesses the investment is a no brainer in terms of the investment paying for itself however obtaining the necessary funding can prove a challenge for many businesses. This article may help you understand as to what is achievable in terms of finance.

XL Business Finance has been helping businesses with business finance for over ten years. Whether it be finance lease or hire purchase we can structure the application in order for you to get the best chance of success. The problem is that all finance companies will view digital kit as unsecured lending and therefore the business must have a very strong balance sheet, be trading for more than 3 years and be profitable. If finance is not forthcoming with a prime lender then a business may find themselves caught between a rock and a hard stone. The business isn’t strong enough for a prime or high street finance company however the other sort of finance company is an asset based lender which will view the kit as have no security and as such will not provide funding. There are a number of sales aid finance companies which specialise in financing this sort of kit however they all require personal guarantees and they will only lend a max of £10k per director. For obvious reasons most directors don’t like to provide guarantees but for many businesses this may be the only option.

Grants for Improving Your resource effeciency

Monday, March 15th, 2010

If your business is planning to make a capital investment that will reduce carbon emissions, waste or water consumption than your business may be eligible for a grant. The project must contribute to reducing CO2 emmissions  and generate wider environmental benefits.  XL Business Finance has teamed up with a firm of  local accountants that specialise in obtaining grants and business funding. Experience shows that if a specialise company apply on your behalf you have a much greater chance of success. Combined with equipment finance from XL Business Finance a project that otherwise may have been out or reach suddenly becomes a possibility.

There are however a number of criteria. Projects that have already started will not be eligible  and cannot be funded. The minimum capital expenditure spend must be at least £20,000 There are also a number of restrictions to the grants which include production of synthetic fibres, textiles and clothing, shipbuilding, coal and steel, agriculture, food processing, banking ( bankers don’t deserve any money in any case), insurance , education, local social welfare. In addition all other possibilities of funding must have been exhausted included bank loans and EFG funding. So long as the project is either for  water usage, energy generation and control, recycling, information technology, transport or waste reduction then it is worth giving us a call.

Attention all car owners!

Sunday, March 14th, 2010

If you are looking to raise cash quickly  we can now offer a short term funding solution using your car as security. If you have a luxury car free of finance , you can release the moneytied up in your vehicle on a short term basis. The cash can be used for any purpose, e.g a deposit on a house or to ease a short term cash flow problem. During the term of the loan the car would be stored in a secure facility and would be delivered back to your door when the loan is repaid. The interest rate will vary depending on the individuals credit worthiness .

Although the interest rates on this might be quite high at circa 4% per months this will provide many individuals and businesses a life line. If you consider it  is very difficult to obtain refinance against a luxury vehicle and the min period is usually two years the flexibility that this product offers may actually prove quite good value. It doesn’t matter how bad the applicants credit is , so long as you are prepared to hand over the keys and you can prove title finance will be available to just about anyone. Please give XL Business Finance  a call today to see how much cash we can release against your pride and joy.

Obtaining business finance for a new start company.

Tuesday, March 9th, 2010

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.

There are still many non bank owned financial institutions providing hire purchase and finance lease facilities for new start businesses. Providing that the directors are home owners with a bit of wool on their backs it may be possible to provide finance depending on the cost of equipment and the quality of the guarantor. Most finance companies will require a personal guarantee which says if the business doesn’t pay then the director as an individual will be liable. The directors must definitely be home owners with little or no adverse credit. If in doubt with your written permission we can do a personal  credit check on your behalf.

In addition invoice finance in the form of factoring should be relatively easy to obtain. Again providing the individuals as directors are relatively clean and the debtor book is of reasonable quality a decent locally based invoice factoring company will be able to provide you with cash against your unpaid invoices.

 Which finance company is best for your particular needs depends on the industry that you operate , your geographical location and your estimated turnover. Again XL Business Finance will be happy to assist you find the most suitable funding partner.


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