Answer- Speak to a good invoice discounting broker who understands the Industry
There are two outstanding reasons for not applying for invoice discounting directly to a finance house.
Why you should speak to a invoice discounting broker
- At the last count there were 92 Finance Companies, who will offer you a variety of deals from funding a single invoice to all of your invoices, both disclosed or undisclosed
- Some companies promise a great deal and deliver little; some are fraught with danger and can turn a relatively healthy company into the clutches of Insolvency. However, there are some really good Finance Houses, who offer tremendous support to their clients
What will an invoice discounting Broker do?
- Listen carefully, look at what you are trying to achieve.
- Suggest a Finance Company, that know and understands your particular type of business
- The broker will make sure your turnover bracket fits into the center of their client portfolio.
- The essential piece is ensuring you meet a senior person who really understands your type of business.
We believe passionately that Factoring and Confidential Invoice Discounting, can work incredibly well for many but not all businesses, there are plenty of financial alternatives available.
Too often just the basic questions are asked, how much does it cost. What percentage do you advance? Which tends to lead the Directors to one size fits all companies. Some good some bad, they sound cheap and might have a big brand behind them.
If your business is quite straight forward, then a Bank will almost certainly be your best bet, but which one? One of the Banks at present is the ” leader of the field” offering an outstanding financial deal and really working hard on customer satisfaction.
If you do not have a detailed knowledge of all the very different Finance Companies it is very easy to choose the wrong one.
Will they be there when you need them? Will they cause problems with your clients? Will they actually end up damaging your Cashflow by their poor credit control and client handling? You invariably get what you pay for, you don’t go out and buy the cheapest pair of shoes you can find, because they will probably let you down when you need them most. A poor Finance Company might upset your clients and also increase your costs by poor debt collection and added interest charges.
A good Finance company, will be there through thick and thin and will do way more than expected, when they know and understand your business.
The problem comes when a special request is made to the Finance House.
Special requests, tend to occur far more frequently than one envisages at the outset, they could be;
Client driven, a client does not like the way the debt is being chased.
You need an advance above your agreed limit due to the purchase of extra supplies, due to increased orders.
Your debt concentration with one client gets to high.
Whereas when you have personally met a key decision maker and chosen the right firm, who knows and understands your particular type of business, you can work together to make your request work, you will find that you have a real financial partner, who is there to help and support your business.
To discuss this further, please pick up the phone, and call Mark Smillie 0800 612 5364, out of hours 07710 466166
Time wasters are always welcome, I love a challenge and I love what I do, I am a very lucky man.
Or why not just have an overdraft facility secured on your book debts with a Limited personal guarantee, say at 20-30% of the facility and you just collect your debts as normal (a limited personal guarantee, it makes for a happy marriage, keeping the home safe).
New and easy Business Finance without a Personal Guarantee
No commitment or monthly Fee,choose an invoice or multiple invoices, receive the money the same day and collect the invoices yourself and no Personal Guarantee is necessary.
Funds are normally through within 48 hours on the first drawdown and same day afterwards.
The fees are clear and transparent, the average being 1.5 to 3% depending on size and frequency of the transaction.
The charges reduce depending on amount of use and turnover and can go significantly lower.
Company should have a turnover exceeding £100k, been trading for at least 6 months and have a UK Director
Minimum advance starts at about £5k with largest advance to date being £1.5million
What types of business are suitable?
Virtually every type of business
Business to business
Construction, building and contract work,
Applications for Payment as advances can be paid prior to a QS providing you have dealt with the client before.
Seasonal and project based businesses.