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Cash Flow Loan Finance

Businesses have many options when considering cash flow loan funding for their business. Bank loans and overdrafts have historically been the preferred choice of cash flow finance. However, today more and more businesses are waking up to the real benefits of alternative sources of finance. Solutions such as factoring and invoice discounting can provide businesses with a flexible and ongoing supply of funds by releasing money tied up in unpaid invoices. Something like 40,000 SME's now use this form of cash flow finance and it is regarded as a mainstream cash flow loan opportunity. Payroll finance is also now available.

Factoring or invoice discounting are where the finance company will turn up to 85 per cent of the value of each sales invoice into cash within 24 hours. The finance company can work alongside the business to collect in any outstanding payments of those invoices from the customers. The remaining 15 per cent, less a small service fee, is paid to the business once payment has been received.

The benefits to a business are that it not only receives an immediate cash injection but also gains access to an on-going source of funds, linked directly to current sales. It can improve profitability as the business pays suppliers early, buys in larger quantities and takes advantages of any volume discounts that are available. Businesses using a factoring facility can also save costs on postage, stationery, telephone calls and most importantly it allows managers to spend their time more productively developing business instead of chasing payment.

• Factoring
• Invoice discounting

Invoice Factoring

Invoice factoring is the immediate injection of cash against value of outstanding invoices. Also known as account receivable factoring, invoices are raised up to 85% of the invoice value is released within 24 hours, the remaining 15% is paid, less a small service fee, once invoice factoring payment is received from the customer.

• With invoice factoring the business has access to an ongoing supply of cash linked to sales.
• Management of sales ledger by chasing and collecting outstanding invoice payments from customers on businesses behalf.
• Preparation and sending out statements, telephoning customers, and payment collection.
• Maintaining dedicated accounts of transactions.

Non-recourse factoring

Exactly the same as account receivable factoring but additionally...

• Added bad debt protection

This provides peace of mind that the company gets paid even in the event of a customer's insolvency or inability to pay.

Export factoring

Helps businesses to develop overseas profitability with confidence.

• Immediate injection of cash against value of outstanding export invoices.
• Remove hassle of dealing with overseas customers, by chasing and collecting outstanding payment from companies overseas customers.
• Company can decide whether to use in-house multilingual team or worldwide.

Invoice discounting

Invoice Discounting can improve your cash flow by providing an immediate injection of cash against the value of your outstanding invoices. You are given up to 85% of the value of your outstanding invoices. The remaining 15% is paid to you once your customers pay their invoices. Your business has access to an ongoing supply of cash which grows in line with your sales. You would have 24-hour Internet access to keep track of payments received and the amount of funding available to you. Your customers make payments via a specialist bank account. Through invoice discounting, you retain control of your collections process.

Is your business suitable?

Ideally your business needs to be turning over in excess of £0.25 million per annum and trading profitably in order to qualify for an invoice discounting service.

Confidential Invoice Discounting

Basically, confidential invoice discounting is the same facility as an invoice discounting facility but it is offered confidentially so your customers are unaware of a factors involvement. Confidential Invoice Discounting provides an immediate injection of cash against the value of your outstanding invoices. You are given up to 85% of the value of your outstanding invoices. The remaining 15% will be paid to you once your customers pay their invoices. Your business has access to an ongoing supply of cash that grows in line with your sales. With a Confidential Invoice Discounting service you would have 24-hour Internet access so you can keep track of payments received and the amount of funding available to you. Your customers make payments against their invoices via a specialist bank account.

Is your business suitable?

Your business needs to be turning over in excess of £0.25 million per annum and trading profitably in order to qualify for a Confidential Invoice Discounting service.