A question that we get asked most regularly. The simple answer is that it depends on the particular needs of each customer. It also depends on the length of time the business has been trading , is it profitable and the quantity and quality of the ledger. If it is a very clean ledger ( or debtor book ) in that it is not difficult to collect payments then in theory there should be many finance companies to choose from.
However you must take into account other considerations. Certain finance companies are very good at servicing certain debt. There is only one high street bank that is any good with foreign and international debt and there is only one bank based invoice discounting company that is any good at financing contractual debt. And guess what they are two completely different banks. Some banks are also good at offering built in credit insurance and others can be difficult when it comes to setting funding limits. Most banks and independent factoring company are fairly similar when it comes to pricing however the cheapest deal isn’t always the best.
A customer quoted to us recently that he wished he had chosen a high street invoice discounting company but rather that he he had had gone with a independent finnace company that traditionally could be more flexible and thus providing more cash against his invoices.
Tags: invoice discounting
