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Still one of the biggest complaints we have from customers is the length of time it is taking their customers to pay. Fr0m the smallest of companies to the  the biggest PLCs the word on the street is that businesses are taking longer to settle their debts. Debt turn is increasing causing further misery on already cash strapped businesses. The good news is that factoring with the right finance company will not only release up to 85% of your unpaid invoices it will also provide a credit control facility whereby the finance chase your debts on your behalf.

Beware though not all factoringcompanies are the same. When credit terms are being stretched to the limit it is important that you get a factoring company that has a reputation for collecting invoices quickly, professionally and efficiently. You ill be surprised that there is a massive difference between service between invoice finance companies. For example many og the high street bank based factoring companies will nly chase your top 3 companies the leaving the rest to be chased by letter. No wonder some of the high street banks can do it so cheaply. Remember factoring is a value added product and by a certain degree you get what you pay for.

Other factors also needed to be taken into account. For example some the largest based factoring companies  will have their credit control in one town, their payment centre in another end of the country and their sales office in timbuktoo. How can they possibly provide an efficient service. In a nut shell they don’t . Monies get paid to suspense accounts while they run around trying to work out where they need to appropriate the cash.

To find out which invoice factoring company will be best for your business give Managing Director Mark Redman a call on 07748 635 206 24/7.

One of the biggest issues facing small businesses in the current financial climate isthe lack of funding against certain customers. It is all well and good obtaining a factoring facility with a headline 95% prepayment if the finance company restricts funding against certain customers. Unfortunately many businesses will place that invoice finance with a factoring company promising the earth however if you are not careful you will end up with a finance company that potentially will not deliver.

When choosing a factoring comapny it is well worth asking the potential funder what credit limits they will place against your top ten customes. You will be surprised how this will vary across the number of available factoring companies. XL Business Finance has ten years experience of helping businesses choosing the right finance company and as such we can add value to your business by doing all the hard work.

In addition it is worth considering the overall credit limit. A bank owned factoring company although may offer a cheaper facility they are less likely to increase the overall funding limit as quick as an independent factoring company. Therefore as the turnover of the business increases you may find that funding is restricted. A potential customer told us recently that he wished he had chosen a more flexible bur only slightly more expensive independent company rather than the slightly cheaper less flexible bank based factorig company. A change of factoring company resulted in a much increased availability and more cash which massively helped the cash flow and performance of the business.

As discussed in previous blogs there are many criteria we will consider when choosing the right finance comapny. Size, location, quality of the debtor book, profitability, length of time established and market sectoir are all important factors.

As one of the UK ‘s leading independent finance brokers we have recently been asked to look at a number of factoring deals whereby  the customer has had some serious financial difficulties leading to VAT and PAYE arrears. At least one of these businesses was with another factoring company and at least one had no form of cash flow finance apart from a small bank overdraft. XL Businesses finance in both cases was able to find a flexible and sympathetic finance company.

With factoring it is possible to immediately release up to 90% of unpaid invoices. However there are so many finance companies offering these facilities. If your business has been struggling for whatever reason it is always best to get these issues out in the open. The worst thing you can do is is not disclose the full extent of many problems because most finance companies will discover any problems for themselves. This will rightly put the finance company on the back foot as they will view you and your business with an air suspicion.

VAT and Vat arrears is becoming more and more common place and whilst this is not ideal this doesn’t automatically exclude you from debtor finance. You might as well forget about finance with a high street bank and if you are already factoring or invoice discounting with a bank based factoring company you will probably find you have an unsympathetic approach from your bank.  This may result in reduced credit limits on individual customers and the   overall funding limit being reduced which obviously increases the problem further.

A more flexible approach from an independent factoring company can often result in more cash.  In addition there   are other financing options which can often help with cash flow. If your business operates heavy plant and machinery and industrial equipment a new invoice finance provider combined with refinancing of existing plant and machinery can provide much needed cash flow.