Benefits of Invoice Receivables Finance

What does receivables invoice finance Cost? The costs of Invoice Discounting and Factoring consist of a service, interest on the discounted amount and an administration fee for each invoice issued, plus an additional amount if bad debt protection is required.

A typical breakdown of costs would be a service fee between 0.5% to 1% plus interest at circa base rate plus 2.5%

In many cases the savings gained by outsourcing management of your debtor book can reduce the true cost to near zero.

Who can benefit from Receivables funding?

We can arrange cash flow solutions for the following situations

• Turnover £100,000 to £100m
• Established & Start Up Companies
• IVA's & CVA's
• Partial Factoring
• Poor Credit History
• Contractual Debt
• Change Existing Factor
• Rejected by Other Factoring Lender

Advantages of Receivables Finance

• Immediate Cash without consideration of a business's credit rating.
• No long term contracts, you can discount as much or as little as required within agreed limits. Unlike overdrafts the facility does not need to be renegotiated when increased.
• No other security required.
• Factoring provides the company with professional credit collection services.
• Factoring reduces Overheads via reduced credit department offsetting the costs and can make the actual costs near to zero.
• Increased cash flow, increasing working capital, eliminating overdrafts, allows bills, taxes to be paid on time.
• Off balance sheet financing improves credit rating allowing further borrowing if required.
• Cash on hand allows opportunities that present themselves to be taken.
• Credit checking facilities of potential customers may be made available from some finance lenders.

Dis-Advantages of Receivables Finance

• Service / interest charge need to be compared against traditional banking facilities.
• Some types of Invoice Discounting i.e. factoring is disclosed to your customer so you need to have confidence the factoring company is courteous & diplomatic with your customer as you would be.
• Watch out for term of contract and notice periods. Termination requires full repayment of funds.
• Other fees may apply for late payment etc.