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Archive for 2011

Collecting Cash Before Christmas!

Tuesday, December 6th, 2011

It can be difficult to get payments at the best of times from your customers without having to deal with Christmas. Christmas often sees people spending money on presents rather than on their due and payable accounts. The following methods have been expertly provided by Roger Brown of NuOrder Intelligent Financial Business Consulting:

Send accounts early. Sending your accounts out earlier than normal will help you to get money in quicker and payments on time. December may see you struggling to receive any money so send them a.s.a.p.
Phone customers. You might like to ring your customers prior to their account being due to ensure that you will receive payment on or around the account due date. This could reduce the amount of people likely to pay late.
Offer a Christmas discount. As a Christmas generosity you can provide a small discount to those customers who pay their bill prior to the due date. Your discount only needs to be 1% or 2% off the total price payable which to a customer can be a lot, especially when saving to buy their loved one something special.
Deposits. For new customers wanting to use your business prior to Christmas you may decide to implement an initial payment strategy which allows you to collect a portion of money from your customer, ensuring that you have sufficient money coming into your business. Furthermore, if your customers are adaptable to your business you may decide to ask for a deposit, only during the months of November and December.
Part payment opportunities. Depending on the size of your customer accounts and orders, a part payment system might be suitable for your business. This system allows you to collect money on a regular basis over a specified period of time without putting the customer into hardship. Again this will help you to collect funds for your business.
Competition. Again this will depend on your type of business and what you can offer, however a competition can be setup for account payers. You might have a Christmas hamper or go to an extreme such as a Christmas holiday, in which your customers will enter free when they pay their account by the specified date.

Getting paid for your goods and services on time is important and therefore you may need to implement some measures over the Christmas period to ensure you receive your money when it is due and payable.

Tags: Cash Flow
Posted in Cash flow finance, General | No Comments »

Euro Crisis and the possible affect on Business Finance

Wednesday, November 16th, 2011

I think it goes with out saying that the continuing eurocrisis will have a significant affect on business lending via the high street banks and finance companies. If any of the euro companies default on their debt there is the potential for significant bank write offs which in turn require the banks to recapitalise resulting in less cash for the business borrower. The goods is that there have always been and always will be alternative forms of business finance.

XL Business Finance has for the last 10 years been providing alternative forms of business finance. Whether a business is looking for invoice finance such as factoring or invoice discounting, asset finance or refinance, or alternative forms of specilaist finance such as trade or construction finance there is always an alternative to the high street bank. These finance companies maybe lesser known but they are often specialists in their particular sector and can often provide alternative and often more flexible and creative forms of funding.

Tags: business finance
Posted in Business finance | No Comments »

Organising retrospective asset finance

Wednesday, November 2nd, 2011

Ever wished you had funded your cap expenditure requirements instead of paying cash. Did you know it is possible to organise retrospective hire purchase and finance lease deals within 3 months of purchase?

So many businesses come to us asking for additional working capital following cash purchases of plant and machinery. In today’s economic climate trading conditions can rapidly change and it makes prudent business sense to fund as much as possible. Cash is King as they say. Funding is available at decent rates, subject to credit of course and providing you meet the funders lending criteria. If the purchase is more than 3 months ago don’t worry, finance may still be available but it is a different type of funding. Asset refinance is provided by a number of specialist asset based lenders and it is an area that XL Business Finance has many years experience.

Tags: asset refinance, hire purchase, leasing
Posted in Asset Finance | No Comments »

Selective Factoring

Monday, October 31st, 2011

It is now possible for business owners and managers to select which customers/transactions they would like to fund, collect or insure against potential bad debt!

Selective factoring offers customers the independence and flexibility that traditional factoring does not. The major benefit to businesses is that Selective factoring looks at individual transactions rather than the whole balance sheet allowing new start businesses to flourish and grow. For larger businesses it allows them to factor individual invoices, where whole factoring is not wanted or needed. XL Business Finance has been helping businesses for over 10 years find the most appropriate business finance solutions.

Tags: Factoring
Posted in Business finance, Factoring | No Comments »

Why use an asset finance broker?

Thursday, October 20th, 2011

Do you need assistance with finding a hire purchase or finance lease facilities for new or used capital expenditure projects? XL Business Finance has access to many specialist asset based lenders providing you with competitive deals many of which are not available via the high street banks.

Never has a good asset finance broker been able to add so much value to businesses in this difficult economic climate. There are many reasons why you should use a broker a few of which are provided below.

Many high street banks are only providing hire purchase and finance lease facilities for their own customers that meet a certain criteria. If your business is good enough to meet this criteria then great. However many are not. If you have a good business but perhaps are fully exposed with your existing bank or you would prefer not have all your eggs in one basket there are still a few prime lenders that deal purely with the broker market providing an alternative to the high street banks. These funders are happy to provide 3rd part hire purchase and finance lease deals which sit alongside your existing agreements.

If your business has however has had a number of issues an experienced asset finance broker will be able to package the deal in the best possible light from an underwriters perspective. This ensures that you have the best possible chance of success with the most appropriate finance company. There are still many smaller lessor known finance companies that provide funding for many different businesses assets and circumstances. It is simply a case of getting the correct information and making sure we are dealing with the most appropriate funder.

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

Do you need trade finance?

Tuesday, October 18th, 2011

Your goods are pre sold but you don’t have the working capital to purchase your goods in advance. XL Business Finance has over 10 years experience helping businesses with trade finance facilities and has a number of alternative solutions.

For one reason and another many businesses are struggling to obtain financial support from existing high street banks. This is never more true for businesses looking to import goods and products from abroad. The problem is that you have an order in the UK, your goods have been pre sold, however you don’t have the working capital to purchase the goods in advance. Whilst banks do a certain amount of trade finance it is usually for existing and well established customers with very strong and profitable balance sheets. Banks generally will not support businesses trading for less than 3 years and very rarely will help businesses with marginal credit.

The good news is that there are a number of independent trade finance companies that may be able to assist. It will certainly be easier if your goods have been pre sold as not only will the stand alone trade finance companies potentially help but also there are a number of factoring companies that also offer trade finance solutions. This is the preferred option for many businesses as a complete financial solution is provided form start to finish. A trade facility is provided for the business to import the goods and once an invoice has been raised in the UK upon delivery the trade finance facility is repaid via a factoring or invoice discounting facility. This factoring facility is repaid when the customer pays the invoice at a agreed future date, ie 30,60 or 90 days hence.

Tags: Factoring, trade finance
Posted in Factoring, Trade Finance | No Comments »

Avoid Becoming a Statistic

Wednesday, September 28th, 2011

The Bank of England’s recent Credit Conditions Survey found that default rates on loans in Q2 increased for small businesses. By acting now, an invoice finance provider can help your business to avoid becoming part of these statistics.

In addition to trying to win new business, companies are equally concerned about whether their existing customers can pay, and on what terms. Businesses often rely on loans and overdrafts to provide the capital they need; in recent years however, a variety of invoice finance options, such as factoring have helped SMEs to ease their funding gaps.

Not only do these arrangements have more flexibility than bank loans, but they are quicker and tailored to a company’s specific requirements. In both good and challenging markets, invoice finance can provide the flexibility and access to capital that a business needs to thrive and grow. The annual cost of a factoring facility starts as low as 1% of sales so it is a very cost effective option for business owners.

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

Banks still letting smaller companies down

Thursday, September 8th, 2011

Data just released from the British Bankers’ Association show that lending to private,non-financial companies reduced by £2.5 billion in June from May, the same level as seen one month earlier.

This is an even larger amount than the average £1.4 billion monthly drop seen over the previous six months; it is apparent that despite government policies and public calls to increase lending to this sector of the economy, there is still reluctance from banks to support those businesses that really need some help.

However, there are alternatives that are still available to smaller businesses; banks are not the only option. Invoice finance could be a viable solution for companies that would otherwise struggle to find the finance that they require. Without the need for additional security a bank may require, Invoice Finance can provide the necessary funding to smooth out your cash flow and provide the working capital you need to survive through these challenging times.

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

Is the business overdraft dead?

Wednesday, September 7th, 2011

Don’t be surprised that if over the next few months banks start to pull in business overdrafts. There is a very good reason for this and one they will probably never admit. One thing that has come out of the credit crunch is that banks are under capitalised which in turn affects their credit ratings and the cost they borrow money which ultimately affects the rates to the average punter.

When a bank lends money against an overdraft facility it must have far more cash in reserves than any other finance facility. Therefore the more exposure it has against overdrafts the less cash it needs in reserve and as such the better it’s credit rating will be. Therefore if the banks are to improve they must improve their credit rating and one way of doing this is to reduce customers business overdrafts. This has been going on already however news on the street that the banks are up for another tidying exercise.

This will ultimately leave customers in the lurch with possibly no bank based lending alternative. The good news is that there many alternatives to the high street banks. Cash flow finance such as factoring and invoice discounting are credible alternatives. Asset refinance and EFG lending and trade and stocking facilities are also options.

Tags: business finance, cashflow finance
Posted in General | No Comments »

Can Asset Based Lending provide an alternative to high street banks?

Monday, September 5th, 2011

A traditional Asset Based Lender or ABL predominantly provides cash flow finance. The main facility they offer will be invoice invoice discounting however they can also provide stocking finance, plant and machinery finance/refinance and for the right customers commercial mortgages as well. Although the banks serve a purpose for many businesses the amount of facilities that are available are often dictated by the size of the balance sheet and and previous years trading performance. Therefore the level of available funding isn’t necessarily related to the amount of available security. How many times have you heard a business owner say that the bank has plenty of available security but the bank will not increase their facilities

ABL lenders look at things in a slightly different perspective. Whilst it is important that they buy into the business and are comfortable with its trading performance they are mainly concerned with the available level of security. An invoice discounting facility will provide funding of circa 85% of the unpaid debtors. They will also consider providing additional working capital secured against plant and machinery. They will lend anything up to 80% of its value depending on the circumstances around the deal. A true revolving stocking facility may also be appropriate and potentially commercial mortgage funding is also available. In addition an ABL lender is not necessarily after the clearing banking and as such you will be able to leave your clearing with your existing high street. This potentially makes for an easy transition to potentially more flexible and supportive funding arrangements.

Tags: cash flow finance, invoice discounting
Posted in Cash flow finance, invoice discounting | No Comments »

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