Cash Flow Finance, otherwise known as Factoring or Invoice Discounting, has been in existence for over 30 years. Those who do not fully appreciate the ways in which it can help a business, in the short, medium or long-term, do not always understand the flexibility, efficiency and cost savings it may bring.

Imagine the scenario:
A manufacturing company has a bank overdraft, fully secured against personal assets, such as property

The company standard terms are 30 to 60 days to Debtors and the same to Creditors

In theory, as the company debtors pay their invoices, so creditors are also being paid

However, the company credit control is a little stretched and debtors are late paying

In the meantime, creditors are not prepared to wait, and

The bank will not extend the overdraft facility, as the security has no extra comfort margin

Consequently cash flow gets very tight, with suppliers, PAYE and VAT pressing, but the company has

Debtors who, although a bit slow in paying, are still good for payment.

Solution:
Using the existing Debtors, which, for example stand at £100,000, we can immediately unlock up to 90%, providing payment history is satisfactory. Not only will this immediately release cash, but also, for a cost effective service charge, the Factoring Company can handle the TOTAL credit control function. This will allow the company management to concentrate on more profitable business areas, such as increasing sales or deploying staff to other key areas of the business.

In addition, the release of cash into the business may also improve supplier terms such as discount for early settlement. Not only does your business receive immediate cash, it can also improve its profit margins, through supplier discounts.

Furthermore, recent UK legislation, such as the Brumark case, means that companies need to carefully consider how they finance their business.

We have links with all the major Factoring companies in the marketplace and can help virtually all types of business.

With over 35 years of banking experience, we are well placed to help.