In our opinion yes. The problem with banks is that they blow hot and cold. They might do some fantastic invoice discounting deals in the good times however as soon as it starts raining they more often than not want their umbrellas back. A customer requiring a large facility of say two or three million may find themselves with restricted credit if their is any change in their performance.
We have seen this recently with very strong businesses that have seen profits drop but for positive reasons such as investment in new equipment and premises. The fact is the banks don’t always like to see a drop in performance irrespective of the reasons. Comined with restructuring and merging with the high street big banks you will find a very erratic approach to their lending criteria and possible clipping of facilities.
The good news is that there are alternatives to the high street banks. During the good old days, the recession and now the slow recovery these alternatives have always taken a consistent approach to their lending criteria. These are specialist invoice discounting companies , whilst funded by big lessor known merchant banks have their own autonomy and there is enough variety to cove most situations. A £3.0m facility is a drop in the ocean for a couple of these funders. At £3.0m plus even some of the high street banks might start getting a bit jittery. It appears that the banks want to collect as much money in at the moment rather than lend it out.
Tags: invoice discounting
