Invoice Finance Tips
Here are some helpful invoice finance tips and hints about factoring and invoice discounting facilities. If you want to discuss anything please remember you can get in touch on 0845 863 0738
- Remember that all providers have very different criteria. Just because one invoice finance lender cannot help you don’t give up. The likelihood is that there is a lender out there who can help.
- Lenders all have different capabilities in terms of how they deliver their product and the levels of service that they offer. On that basis it is important to select the right lender from the outset. If you are already using an invoice finance facility and you are unhappy then moving to a new provider could be the answer.
- Indicative terms are exactly that. Until you have a genuine credit backed offer the pricing and structure of any facility can be changed dramatically.
- Remember to review your finance facility on a regular basis. A major variable when pricing a facility is turnover. The higher the turnover the lower the % service fee should be. If you business is growing then you may be entitled to a rate reduction.
- Minimise fees by planning ahead and transferring what you need by BACS that can take 4 working days. All lenders will charge you for same day transfers and these charges can quickly add up.
- Minimise the interest you pay by only drawing down the funds that you need. In theory if you could maintain your bank account as close to a zero balance as possible and only draw from your invoice finance facilty when you need it you will minimise your borrowing costs.
- Beware of headline rates. Many lenders will quote attractive headline rates with a view to attracting customers. Unfortunately these are not always a true reflection of total costs.
- Maximise the true prepayment level. It is important to understand that the headline rate quoted as the prepayment level can be significantly reduced by a number of variables including concentration limits, overall facility limit, individual debtor limits, reserves and exclusions. It is important to understand these restrictions and they will differ from lender to lender.
If there is anything that you would like to discuss invoice finance tips with us please feel free to contact us on 0845 863 0738 or email us.
