Survival Guide
Content
Invoice Finance Survival Guide
MyInvoiceFinance.co.uk
Helping Fund UK Business
Watch the ‘The Boss’ Video
Contents
Why Invoice Finance?
Page 2
Invoice Finance is only limited to certain types of debt
Page 3
The contract will be binding
Page 3
Minimum fees can be costly
Page 4
Concentration limits can be restrictive
Page 4
Debtor limits can be restirctive
Page 4
Tap here to visit site.
Why Invoice Finance?
The answer to this question really depends on what you can achieve with
the additional time and working capital such a service generates.
For the financial assessment, carry out a Profit & Loss forecast and
Cashflow forecast both with and without the facility to see which provides
the most benefit.
Furthermore construct a business plan of what you could do with the extra
time it frees up and see how much extra revenue it can generate.
If you have any questions about the benefits of invoice finance, or its costs,
then please give us a call. We will explain the pros and cons of each option
available to you without the hard sell and allow you to make an informed
decision for your business.
The Pitfalls of Invoice Finance (Factoring and Invoice Discounting)
To engage the services of any financial organisation without understanding
the potential pitfalls can be problematic. We therefore make the situation
clear from the outset, ensuring you enter into your proposition knowing all
the facts.
Watch the Why My Invoice Finance Video
Tap here to visit site.
1. Invoice Finance is only limited to certain
types of debt
To ensure that the level of risk is contained, there are only certain types of
debt that are suitable for financing. Risk parameters will be set for your
facility and regularly monitored by the lender to ensure total clarity at all
times.
2. The Contract Will Be Binding
Most invoice finance contracts are agreed for a set period of time, usually
12 months, but some will offer as little as 28 days. Therefore it is essential
to be able to assess the long term benefits of such an agreement before
entering into it. Early termination of your contract can lead to lenders trying
to recover their anticipated income in the form of early termination fees,
which can prove costly.
In the event of business failure, collect out fees may also be payable to the
lender who will collect all outstanding payments from your clients as soon
as possible. In such cases termination fees can be as much as 15-20% of the
outstanding ledger.
Tap here to visit site.
3. Minimum Fees can be Costly
5. Debtor Limits Can Be Restrictive
If your turnover drops during the term of your agreement and minimum
Sometimes it can be very tempting to deal with a new customer against the
fees come into effect, the cost of financing can become significant. It is
advice of the lender. However debtor limits are put in place to limit the risk
therefore important to have as clear a picture as possible of what your
turnover is likely to be for the coming year. Obviously there are no crystal
balls so if your turnover does drop drastically during the term of your
of bad debts on both sides. If you feel that debtor limits are restricting the
growth of your business then it is possible review such parameters with
your lender or a new funder.
agreement, talk to your My Invoice Finance about what can be done. It may
Ensure you choose a lender that is able to respond quickly to such requests
be possible to renegotiate an increased percentage service fee but lower
but still take full advantage of the advice that you are being given.
minimum fees to make the entire service more affordable.
The key to avoiding the pitfalls that sometimes arise with invoice finance is
to set up a facility that works from the outset.
4. Concentration Limits Can Be
Restrictive
The concentration limit is the percentage of your ledger that is outstanding
from a single debtor. Some lenders restrict this to 20% while others are
happy to provide funding against one single debtor.
It is imperative to understand the concentration limits imposed from the
outset. If large orders do come in which are likely to impact on
concentration, bring them to the lenders attention as soon as possible and
discuss what can be done.
Tap here to visit site.
Do your research, understand the fees and how the finance facility will
meet your needs and choose the right lener for you and your business.
Visit MyInvoiceFinance.co.uk to search for the
finance provider for YOU.
Tap here to visit site.
MyInvoiceFinance.co.uk
Helping Fund UK Business
Watch the ‘The Boss’ Video
Contents
Why Invoice Finance?
Page 2
Invoice Finance is only limited to certain types of debt
Page 3
The contract will be binding
Page 3
Minimum fees can be costly
Page 4
Concentration limits can be restrictive
Page 4
Debtor limits can be restirctive
Page 4
Tap here to visit site.
Why Invoice Finance?
The answer to this question really depends on what you can achieve with
the additional time and working capital such a service generates.
For the financial assessment, carry out a Profit & Loss forecast and
Cashflow forecast both with and without the facility to see which provides
the most benefit.
Furthermore construct a business plan of what you could do with the extra
time it frees up and see how much extra revenue it can generate.
If you have any questions about the benefits of invoice finance, or its costs,
then please give us a call. We will explain the pros and cons of each option
available to you without the hard sell and allow you to make an informed
decision for your business.
The Pitfalls of Invoice Finance (Factoring and Invoice Discounting)
To engage the services of any financial organisation without understanding
the potential pitfalls can be problematic. We therefore make the situation
clear from the outset, ensuring you enter into your proposition knowing all
the facts.
Watch the Why My Invoice Finance Video
Tap here to visit site.
1. Invoice Finance is only limited to certain
types of debt
To ensure that the level of risk is contained, there are only certain types of
debt that are suitable for financing. Risk parameters will be set for your
facility and regularly monitored by the lender to ensure total clarity at all
times.
2. The Contract Will Be Binding
Most invoice finance contracts are agreed for a set period of time, usually
12 months, but some will offer as little as 28 days. Therefore it is essential
to be able to assess the long term benefits of such an agreement before
entering into it. Early termination of your contract can lead to lenders trying
to recover their anticipated income in the form of early termination fees,
which can prove costly.
In the event of business failure, collect out fees may also be payable to the
lender who will collect all outstanding payments from your clients as soon
as possible. In such cases termination fees can be as much as 15-20% of the
outstanding ledger.
Tap here to visit site.
3. Minimum Fees can be Costly
5. Debtor Limits Can Be Restrictive
If your turnover drops during the term of your agreement and minimum
Sometimes it can be very tempting to deal with a new customer against the
fees come into effect, the cost of financing can become significant. It is
advice of the lender. However debtor limits are put in place to limit the risk
therefore important to have as clear a picture as possible of what your
turnover is likely to be for the coming year. Obviously there are no crystal
balls so if your turnover does drop drastically during the term of your
of bad debts on both sides. If you feel that debtor limits are restricting the
growth of your business then it is possible review such parameters with
your lender or a new funder.
agreement, talk to your My Invoice Finance about what can be done. It may
Ensure you choose a lender that is able to respond quickly to such requests
be possible to renegotiate an increased percentage service fee but lower
but still take full advantage of the advice that you are being given.
minimum fees to make the entire service more affordable.
The key to avoiding the pitfalls that sometimes arise with invoice finance is
to set up a facility that works from the outset.
4. Concentration Limits Can Be
Restrictive
The concentration limit is the percentage of your ledger that is outstanding
from a single debtor. Some lenders restrict this to 20% while others are
happy to provide funding against one single debtor.
It is imperative to understand the concentration limits imposed from the
outset. If large orders do come in which are likely to impact on
concentration, bring them to the lenders attention as soon as possible and
discuss what can be done.
Tap here to visit site.
Do your research, understand the fees and how the finance facility will
meet your needs and choose the right lener for you and your business.
Visit MyInvoiceFinance.co.uk to search for the
finance provider for YOU.
Tap here to visit site.
