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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 »

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
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Leasing and early settlement charges

Wednesday, April 20th, 2011

“Can I get a discount for early settlement ?” is a commonly asked question in relation to leasing and hire purchase facilities. The answer depends on the type of finance agreement, the actual finance company and their policies.

If you have an non regulated finance agreement don’t expect big discounts, especially if you are tied in on a fixed rate deal. As a rule of thumb most finance companies will provide a 4% discount for early settlement for a non regulated fiance agreement however they are not obliged to. You are more likely to get a discount on a hire purchase agreement as opposed to a lease.

However we dont think there are not big savings to be gained. As they say “cash is king so you may as well leave the cash in he bank for a rainy day!

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

Does Your Business have the XL Factor?

Monday, March 21st, 2011

Does your business have the XL Factor. XL Business Finance has been helping Managing Directors and Finance Directors put the X Factor back into their business. Whether it is factoring , invoice discounting , asset finance or refinance we are fast becoming one of the UKs leading and most respected independent finance companies.

In a time when it is very difficult to obtain funding via more tradition banking facilities we go the extra mile to help you find the right funding solution. Whether you are a blue chip company requiring the best interest market or a or a company requiring funding out of an administration we provide by far and away so many options than a high street bank. Give us a call today to see how we can the XL Factor into your business!

Tags: Asset Finance, Factoring
Posted in Asset Finance, Factoring, General, invoice discounting | No Comments »

Cash Flow Loans Explained

Tuesday, February 8th, 2011

There are many types of cash flow loans available to commercial businesses however we thought it might be worth explaining the different options. A cash flow loan in the traditional sense is a loan from a bank based on the performance of the business. Rather than securing the loan against bricks and mortar a multiple of the profitability is lent to the customer. These types of loans reached their peak in the run up to the credit crunch however are only starting to make somewhat of a recovery.

Whilst factoring , invoice discounting and even bank overdrafts are a form of cash flow loan they are different in that they are secured by other means. Factoring and invoice discounting facilities are secured against the debtor book and overdrafts are more often than not secured against bricks and mortar and even personal guarantees. Obviously it is possible to obtain a bank overdraft without security however you will probably know only token overdrafts are available from most banks without the benefit of tangible security

Cash flow lending was very prevalent in the acquisitions and mergers market where significant sums were required to purchase a profitable business however there was very little security in terms of property, findable debtor book or plant and machinery. A traditional asset based lender will lend cash against some all all of these tangible assets.

As with any financial institution the parameters for cash flow lending will vary greatly. An experienced commercial finance broker will have their finger on the pulse and will be able to help you find the most appropriate finance company. Don’t get too excited because we believe that this is still the most difficult area for funding and it will take time before the banks fully regain their confidence in this sector

Tags: cash flow loans, Factoring, invoice discounting
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Credit Insurance explained

Thursday, February 3rd, 2011

It is widely believed that credit insurance can only be obtained on the back of a factoring or invoice discounting facility. This is not necessarily the case and it might be that you can obtain a better deal from an independent company. You may also wonder why one invoice finance company can insure one of your customers but not another. Hopefully this article will explain some of the misconceptions.

Any business can go to a specialist insurance company to obtain credit insurance. The broker will go to the various insurance companies and obtain a packaged policy from the best insurance company. There are a number of fundamental differences which may work in your favour.

Firstly credit insurance companies provided by the banks and the factoring and invoice discounting companies only kick in in the event of an insolvency situation. It is indeed possible to obtain credit insurance that kicks in in the event of a protracted claim. As far as we are aware we there is only one invoice discounting company that provides credit insurance in the event of a protracted dispute. Call me cynical but does anyone else think that factoring companies allow debtors to exceed 90 days so they can.

Secondly factoring and invoice discounting companies charge against the gross ledger as opposed to the net ledger which is possible to do via the correct means.

Thirdly once a debt has exceed 60 days over the normal credit terms the insurance provider will chase the debt on your behalf provided. It doesn’t matter if if your factoring company is supposed to be doing it. two so to speak is better than one

It also possible to get credit insurance for export debt as well

You may also wonder why one factoring company can insure a debt another factoring company cannot..

Tags: credit insurance, fcatoring
Posted in Factoring, General | No Comments »

Who Is doing Enterprise Finance Guarantee Funding ( EFG ) ?

Wednesday, November 17th, 2010

The banks are supposed to be helping small businesses obtain difficult funding in these difficult times and one way is via the EFG or Enterprise Finance Guarantee. Whilst the EFG does not guarantee success of funding via the banks there are one or two viable alternatives via the invoice finance companies.

The problem with the bank based scheme is that a proposal for funding should meet all the banks normal lending criteria. If you have a proposition that they want to do but the only thing that is stopping them doing it is a lack of security then this is where the EFG scheme gives them the security to do the deal. If for some reason they don’t want to do the deal because your business hasn’t been trading long enough or the financials are not strong enough then it wont get passed first base. EFG funding does not make a bad deal good.

An alternative to bank based EFG loans could be funding via invoice finance companies. One funder provides EFG funding on the back of a factoring or invoice discounting company match funding any directors loans but up to a maximum of fifty percent of the debtor book. Another invoice finance company provides EFG funding to give a business 100% of its debtor book.

Invoice finance companies tend to be a little more flexible than the banks therefore if you have drawn a few blanks then it is worth giving them a call. We will gladly point you in the right direction.

Tags: EFG, invoice finance
Posted in efg funding, General, Invoice Finance | No Comments »

Stocking Finance explained

Tuesday, November 2nd, 2010

There are a number of variety of stocking finance options and depending on your particular circumstances there are a number of different products. Depending upon the the finance company you approach these different products may be called something completely different from one finance company to another.

Firstly let me explain we are unaware of any financial institution that offers stocking on a stand alone basis. It is usually provided with another finance product.

The most common form of stocking finance is provided on the back of a factoring or invoice discounting facility. A true stocking facility will provided a a percentage of the total monthly stock on a rolling contract. Beware certain invoice finance companies offer stocking finance but t is only to provide additional security to enable them 10% of your debtor book. Whilst funding in this instance is technically stocking finance the over payment will be reduced over a period of time. There are only a few invoice finance companies that offer the full rolling stock facility and therefore it is worth giving us a call to check.

Stock finance may also be provided as part of a trade finance agreement. Where a business has confirmed orders it may be possible to obtain 100% funding from start to finish. This can either be on a domestic basis or on an international basis. An international trade finance facility will enable a business to import goods and where there are confirmed orders finance can be obtained from start to finish. When the goods are delivered to your customers premises a factoring or invoice finance facility will dovetail with the trade finance facility and provide seamless funding. Therefore technically speak international trade and domestic trade finance could be viewed as stocking finance as well

Tags: international trade finance, stocking finance
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We’re Back!

Friday, October 15th, 2010

Following the construction of our fancy new website by our good friends at Marketing Insite we are hopefully back in the swing of blogging. Yipee I here you cry. Not!

During the last few months or so it is fair to say that obtaining business finance still continues to be difficult especially when it comes to dealing with the banks. Business directors and owners are also beginning to realise that the Enterprise Finance Guarantee Scheme ( EFFG) as provided by the banks is not what it is cracked up to be. Unless the bank wants to deal with you in the first place and the lack of tangible security is the only thing stopping the bank wanting to do the deal then the banks will not offer funding.

In addition it was also possible to obtain grants and loans via local development agencies. Due to the government cut backs these have all virtually disappeared. So what options are there left for businesses requiring additional funding?

There is and always will be various hire purchase and finance lease companies offering funding , however due to supply and demand of funds it is worth consulting a good independent finance broker to search out the best possible deals. More often than not many businesses require additional working capital facilities. We have never been a great fan of bank overdrafts due to the fact they can be quite restrictive and are always repayable on demand. So that leaves us with traditional factoring and invoice finance facilities. Once upon a time this was viewed as a lend of last resort however invoice finance is still one of the most competitive and buoyant growing areas of finance. In addition competitive funding is provided by a large variety of independent companies , banks and building societies all offering slightly different products for different types of businesses.

Tags: business finance, Factoring, invoice finance
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Need a Commercial Mortgage?

Tuesday, May 18th, 2010

We have been approached recently by a number of businesses requiring a commercial mortgage. The advantage of using XL Business Finance is that we have people working for us that have been in very senior commercial positions within banks and know exactly what the banks are looking for in terms of information and types of deals. These businesses recognize that we can add value to the negotiations and dealing with one point of contact saves valuable time and resources. A Finance Director or Managing Director doesn’t need to waste time having interviews with several different finance companies when they can pass over the responsibility to someone that knows exactly what the banks will do and what they are looking for in terms of property and clientele.

The problem with the commercial mortgage market is that there is still not enough liquidity within the banks. They are still being very picky and choosy as to what they will do. As with any lender some are more aggressive than others and they all have a slightly different way of looking at things. Therefore any marginal deals that would have been done before the recession may struggle to get through. In addition it is no longer good enough to have a very loan advance compared with the value of the property. Commercial mortgages are at the moment still difficult to obtain with a low loan to value if the rest of deal doesn’t stack. Serviceability must be proven and ideally the tenant must be of a good quality.

As an independent we know exactly who will do what and be able to find you the most appropriate finance company. This service will not cost you a fortune as for easy cases we will take a fee off the finance company. If the deal is more complex we might take an up front fee however the cost of this fee will hopefully be outweighed by the benefit of us arranging the commercial mortgage.

Tags: commercial mortgages
Posted in General | No Comments »

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