Factoring fees. Are they increasing?

Posted on 28th February 2012 by

The headline rates for factoring fees seem to be reducing again as lenders return to the market and competition increases. This is obviously good news.

However, there does seem to be a lot of additional fees being introduced by lenders. Not necessarily fees that are new to the industry but we are seeing lenders introduce fees that were not previously charged. I have noticed some lenders introducing minimum base rates, refactoring fees, arrangement fees, legal documentation fees, etc..

Annual renewal fees are a fairly new introduction and are akin to overdraft fees as are arrangement fees. Some lenders ae even charging for the privelidge of using their internet system.

I think the message here is to be wary of headline rates. They can be misleading. It is important to consider total factoring costs when making a comparison.

Posted in Costs, General, Invoice Discounting, Invoice Factoring, Invoice Finance, Recruitment | Tagged , , , , , , , | Leave a comment

Sports Bras

Posted on 16th February 2012 by

Sports Bras are related to factoring in what way you may ask? They are not related in any way!

We simply wanted to wish Active Sports Bras all the very best for their launch on Monday, February 20th 2012.

Active Sports Bras are a specialist online retailer of sports bras. Their aim is to provide the top brands of sports bras at low prices. At launch Active Sports Bras will be stocking Freya, Panache, Shock Absorber and Sportjock.

They are also trying to encourage more women back to sport with their “Be a sport, Take a mate” campaign.

Good luck to our friends at Active Sports Bras – Supporting Women in Sport.

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Does factoring impact on profits?

Posted on 14th February 2012 by

Factoring most definitely impacts on profits.

Let’s have a look at the different ways factoring can impacts on profits.

The most obvious way is by reducing profits because of the costs involved. Factoring has a definite and not insignificant cost and these will impact on any bottom line figure. The key is to find the most cost effective solution that will give your business the cash flow solution it requires.

Increased sales can increase profits. I say “can increase profits” bacause margins obviously have to be high enough. Sales can be increased through factoring in the following scenarios:

  • by offering credit terms to customers that you could not previously
  • by providing working capital to fulfill new orders
  • by opening up new export markets by allowing you to trade with peace of mind
  • providing valuable working capital to fund growth

By using factoring you can also reduce the risk of bad debts which can increase profits.

Potentially you can also negotiate or take advantage of settlement discounts with suppliers which can also increase profits.

You really need to do some financial forecasts showing the bottom line with factoring and then the bottom line without factoring. It is important to look at the profit and loss forecasts and also the cash flow forecasts of both scenarios.

Posted in Costs, General, Invoice Discounting, Invoice Factoring, Invoice Finance, Recruitment | Tagged , , , , , | Leave a comment

Recruitment Finance

Posted on 30th January 2012 by

Smart Factoring QuotesRecruitment finance comes in various formats and with various added on services. Typically it is a requirement of temporary recruitment companies who have a weekly payroll yet only get paid by clients on a monthly basis if they are lucky. That said we have sourced numerous facilities for permamnent recruitment companies to allow them to access the cash tied up in their invoices.

Let’s have a look at some of the options available for recruitment finance:

Spot factoring – only this week we have been approached by a recruitment company looking to factor a single invoice for a placement they have made. This is where a factoring company will factor a single invoice for a fixed fee.

Invoice discounting – this is possibly the ‘lowest touch’ form of finance available when looking at invoice finance options. It can be confidential and simply provides cash against your invoices. There are no add on services other than credit protection should you wish to protect your recruitment company against bad debts.

Factoring – this provides cash in the same why invoice discounting does with the added service of outsourced credit control. This can also include credit protection should you want it.

Full back office solutions – this is ideal for recruitment companies who simply want to concentrate on recruitment. Aswell as finance this service will provide the following services: invoicing, payroll, credit control and credit protection.

If you are interested in what recruitment finance solutions are open to you please contact the Smart Factoring Quotes team today on 0845 863 0738

Posted in General, Invoice Discounting, Invoice Factoring, Invoice Finance, Recruitment | Tagged , , , , , | Leave a comment

New Year – New Finance Facility?

Posted on 15th January 2012 by

As it is the new year would it be worth reviewing your finance facility? It is probably a worthwhile exercise for the following reasons:

  • you may be paying a minimum base rate which means you are paying too much and not benefitting from the current low base rate
  • has your turnover increased? If so your service fee is probably too high as it is based on your lower turnover when you set up the facility.
  • Is your funding restricted? If so, structure a facility properly so that cash generation is maximised.

Smart Factoring Quotes will happily conduct a review for you. We will do all the work and our service costs you nothing.

Get in touch today to find out how much money you can save.

Posted in Costs, General, Invoice Discounting, Invoice Factoring, Invoice Finance | Tagged , , , , , , | Leave a comment

Good luck in 2012

Posted on 29th December 2011 by

As 2011 draws to an end we wanted to wish everyone all the best for the New Year.

2011 proved to be another challenging year in difficult economic times. A lot of SME’s still feel let down by our banks and the government.

At Smart Factoring Quotes 2011 was a good year and we were delighted to have helped a record number of businesses secure much needed working capital facilities.

We look forward to working with you in 2012. We hope it is a good year for everyone.

Posted in Costs, General, Invoice Discounting, Invoice Factoring, Invoice Finance | Tagged , , , , , , , , , , | Leave a comment

All the best for the festive season

Posted on 15th December 2011 by

The Smart factoring Quotes team would like to wish everyone all the best for the festive season.

It has been a challenging year for many businesses that we have spoken with. Hopefully 2012 will bring easier times.

For now we wish you happy times with your loved ones.

Posted in Costs, General, Invoice Discounting, Invoice Factoring, Invoice Finance | Tagged , , , , , , , , | Leave a comment

We have reduced a clients service fee by over 50%

Posted on 13th November 2011 by

We have been working with a print company who were using their own bank to provide invoice finance facilities.

They enquired via our website about reviewing their facility.

We discovered that their bank had essentially been overcharging them for the invoice finance facility. This was as a result of their turnover having doubled since they set up the agreement.

By undertaking a full market review we not only improved the structure of the facility but also saved our client over 50% on their service fee.

If you have an existing facility it is imperative you review it on a regular basis. At Smart Factoring Quotes we would be delighted to assist.

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Beware indicative terms

Posted on 7th November 2011 by

We often speak to clients who say they have an “offer” from another lender.

Typically this is nothing more than indicative terms and really should not be relied upon.

Most lenders will follow the following process:

  • Initial meeting
  • Follow up with indicative terms
  • If you accept they will submit to their credit team for a decision (this is the first hurdle where things can fall down)
  • They will then offer an offer subject to survey
  • If you accept they will conduct an onsite survey/due dilligence
  • This survey is submitted to the credit team (this is the second hurdle where things can fall down)
  • From here they will issue legal documentation
  • Even then things can fall over when they conduct searches or when they do an inter factor reference if you are transferring from another lender

It is important to understand what constitutes an offer and what you should and should not rely on.

Posted in Invoice Finance | Leave a comment

Latest client – low minimum fees – ice cream company

Posted on 31st October 2011 by

We were recently approached by a company that sells ice creams and jams to independent shops.

They were looking to offer credit terms to their customers with a view to increasing sales and gaining competitive advantage. However, as a small company they were put off by most factoring companies minimum fees.

We were able to introduce 2 lenders. One offered a deal with no minimum fees while the other, who was a small independent very local to our client, offered a deal with a minimum fee of £600 per annum.

The client is delighted with their new finance facility. We wish them all the best.

Posted in General, Invoice Discounting, Invoice Factoring, Invoice Finance | Tagged , , , , | Leave a comment