Single invoice factoring | spot factoring

Spot factoring or single invoice factoring is an innovative product that only arrived in the UK a couple of years ago but has been a popular factoring product in the USA and elsewhere for quite a few decades now

Unlike traditional factoring arrangements that deal with whole turnover, single invoice factoring has been developed to benefit companies who’s working capital requirements vary month by month and who don’t want to either enter into a twelve month agreement or pay minimum annual fees but would rather just factor sales invoices as and when they need extra liquidity.

Other advantages of single invoice factoring are that there are no setup fees, no minimum annual fees, no lengthy agreements and the factoring company that we deal with can provide funding within a couple of days from initial enquiry.

In addition to the types of trades and businesses that tick all the boxes for regular factoring the single invoices factoring company that Factoring Solutions has elected to deal with will also welcome business from the construction industry as unlike the vast majority of factors they will happily fund against Applications for Payment etc

There are no charges for our services under any circumstances so for an informal, friendly chat with one of the few specialist factoring brokers that are truly independent please contact us now.

 

Factoring Solutions

5 Torridge, Hockley, Tamworth, Staffordshire B77 5QL
 
Tel: 01827 707680

Posted in factoring | Tagged , , | Leave a comment

The perils of non recourse factoring

Two reports in the same week concerning one of the well known high street bank owned factoring companies and their non recourse facilities.

One of their factoring clients suffered a reasonably substantial five figure bad debt which was underwritten by the factoring company and as a result the factoring company reduced the credit limits on the remaining customers refusing to fund any account in excess of the new limit. The company found it difficult to survive on the reduced funding levels so looked to move to a more flexible factoring company only to be told that if they moved the bank wouldn’t pay out on the bad debt.

It seems that the same bank owned factoring company also claim that if their client enter Administration or CVA then the cover on all bad debts that are currently in the system will be automatically invalidated.

Unethical in my view

 

Posted in factoring companies, Non recourse factoring | Leave a comment

factoring for federation of manufacturing opticians members

The Federation of Manufacturing Opticians (FMO) has recently announced a scheme for it’s members claiming to offer preferential rates for it’s members in conjunction with Bibby Financial Services. Whilst not wishing to cast any aspersions on the factoring company who have just taken advantage of an excellent marketing opportunity in these difficult times we do not believe that schemes like this where an association is tied to a single factoring company is in the best interests of the manufacturing opticians (in this case)

Factoring and other forms of invoice finance are rarely as straightforward as it should be with quite significant operational differences between the various factoring companies and there is no “one size fits all” even in cases where all of the companies are in the same industry.

We also take the comment that preferential rates have been negotiated with a pinch of salt and would suggest that all FMO members put that to the test by having a word with ourselves once you’ve received your preferential rates so that you can see just how preferential they really are.

We are specialist factoring and invoice discounting brokers and not insurance or general brokers so for an informal, friendly chat with an expert, please contact Factoring Solutions NOW on 01827 707680

Factoring Solutions

5 Torridge, Hockley, Tamworth, Staffordshire B77 5QL
 
Tel: 01827 707680

Posted in Bibby, factoring companies, Federation of Manufacturing Opticians, FMO, invoice discounting | Leave a comment

Changing your factoring company – part two

There are many reasons why one would want to change their factoring company with the main one being that the facility isn’t performing as well as expected. In times of old the ABFA published the rules and regulations that their members agreed to abide by and one of those rules was that a factoring company wouldn’t put undue obstacles in the way of an unhappy client that wanted to leave.

Historically the factoring company would ask that the balance of any minimum annual fee that hadn’t been paid would be paid as a penalty and the company would be allowed to transfer to a different factoring company as it was deemed fruitless to try to hang on to a client where the relationship had broken down.

Those rules and regulations that used to be on the ABFA’s website for all to read have long since disappeared but what is equally worrying is that in these difficult economic times where factoring companies are struggling to increase their client base one of the major bank owned factoring companies has taken to refusing to allow their clients to terminate early and are forcing them to “work their notice” in the hope that they can be persuaded to stay.

Posted in factoring | Tagged | Leave a comment

Changing the factoring company

We were approached yesterday by a company who had an invoice discounting facility with one of the well known independents for a short while but who had upset them by not passing on a substantial payment from a customer. This had been discovered in audit and the factoring company were so upset that they told their client that they had three days to repay the total investment otherwise an Administrator would be appointed.

The only way that the investment was going to be repaid was to switch factoring companies but there aren’t that many that could move quickly enough. Always up for a challenge we contacted a factor that we know can move quickly at 2:00pm and they were at the company’s premises by 4:00 and had left an offer in principle by 6:30pm last night.

Watch this space

Posted in factoring, factoring companies | Leave a comment

Factoring where the directors don’t own their own properties

I had an enquiry yesterday from a company that had been trading for five years and had been with a bank owned factoring company for the last two. The company was profitable and turning over £750,000pa but had complaints about the service levels from their factor.

I mulled it over in my mind and decided to introduce them to one particular company partly as they were fairly close but to my surprise they turned it down as the director didn’t own his own property. Whilst I can understand the reticence to deal with “men of straw” if it’s a new company and nothing much is known about the individuals but in this case we are talking about a well established company who had been factoring for the last two years with one of the big boys.

I contacted a second factoring company who also have a reputation for the quality of their service but whom I didn’t give this lead to initially as my contact was a couple of hundred miles away and asked whether they would look at a company who had been trading for five years, factoring for the last two but where the director didn’t own his own home – to be told quite refreshingly that in the circumstances they would be delighted to look at it.

Posted in factoring | Leave a comment

The recession and the bank owned factoring companies

We have been receiving an alarming number of enquiries from clients of RBS Invoice Finance complaining that the goalposts have been moved with factoring facility limits slashed as well as a number of other actions taken that were designed to reduce the amount of funding available.

Yesterday’s enquiry was from a company that had been factoring with RBIF for 10 years and had always enjoyed the relationship until recently, complaining that not only had the facility limit been cut but that the collection effort operated by the bank had worsened with telephone chasing cut out in favour of computer generated letters that I think we all know are a complete waste of time and money.

I introduced this company to a factoring company that don’t continually move the goalposts and offer an exceptional service and when I discussed the case with my contact there I laughingly opened the conversation with “I have another disgruntled Royal Bank Invoice Finance client for you”

Posted in factoring, RBS Invoice Finance | Tagged | 5 Comments

The state of the market

The factoring marketplace seems to be changing with far less activity happening than in the past. Companies looking for working capital to fund expansion are few and far between as few companies are expanding at the moment and with many of the major factoring companies losing large numbers of clients due to their inability to ride out the recesssion, the overall market is contracting.

Most of the factoring companies are reacting to the changing marketplace by becoming far more selective in the business that they take on and also increasing rates to compensate for the increased risks

Posted in factoring | Leave a comment

How do people decide which factoring company to go with?

Amongst the factoring enquiries received in March were a couple that decided not to go along with our recommendation.

The first was a new start recruitment company and having discussed his requirements extensively we introduced them to a factoring company known for their high service levels having stressed that they also offered a refund of all fees paid if the company were unhappy with the service levels.

When they later informed us that they had decided to go with an alternative factoring company that they had sourced elsewhere we were somewhat surprised as we had never heard of them. A little investigation turned up the fact that they had rather an “interesting reputation” and quite possibly it won’t be too long before that company becomes another of the insolvency statistics by the time the factor has finished with them.

The second enquiry was somewhat larger and told us that they had an appointment with the factoring subsidiary of their bank but having read our website they were a little concerned about the possible pitfalls and thought that they might do better with an independent.

We introduced them to an independent factoring company who we thought would be far more suitable for them but the factor had difficulty making contact with them as he never returned calls.

Finally today he was told that a meeting wouldn’t be wortwhile as they had just signed up with the bank’s factoring company. I wonder why having asked whether something more suitable existed he didn’t bother to make time to talk to a company who may well have been more suitable, especially when it is something as important to a company’s health as a factoring facility .

Posted in factoring | Leave a comment

Factoring Solutions in 2009

I guess that with the banks’ reluctance to lend money and the general state of the economy it is only to be expected that enquiries for factoring and invoice discounting would be running at high levels. In the first two months of 2009 Factoring Solutions received 62% more enquiries than in the comparable period last year.

The biggest change in market sector so far has been in recruitment which has historically been the mainstay of factors in recent years with quite a few of our enquiries coming from new starts in this industry. So far this year we have received just five enquiries from this market sector which is a much smaller proportion of the total than usual.

The average deal size has increased over last year and although the factoring and invoice discounting companies are looking far more carefully at the risk involved in underwriting new business we have managed to find a home for a steel importer turning over £20m and a manufacturer of extruded window frames turing over £20m with a factory in Poland as well as a whole host of smaller companies

In addition to invoice finance we have also taken an increasing number of enquiries for trade finance including a wholesaler currently discounting his invoices with one of the independents and turning over £10m a year who wanted funding for purchase orders as well as a watch importer turning over £38m looking for import finance and a publisher of video games with annual sales of £10m who was looking for a letter of credit facility.

Whilst the funders are being considerably more careful than in the past it is still possible to place the more difficult deals as evidenced by the renovator of housing turning over £5m and about to enter a CVA which we found a home for

Posted in factoring, invoice discounting, invoice finance, trade finance | Tagged , | Leave a comment