Concerns about the factors' debenture
Most factoring companies will take a debenture over the company’s assets as security.
Many will take this security only over the debts but the belt and braces merchants
will take a charge over everything in sight.
The debenture gives the factor the right to appoint a Receiver and many factoring companies have used or abused this right as a “get out” when things aren’t going as well as they first hoped or when they didn't do their homework properly to start with.
It is food for thought that whilst the number of Receivers appointed by factoring companies should be roughly in proportion to the number of clients they have on board, it frequently isn't.
Anyone
interested in
factoring invoices could be placing their company
at unnecessary financial risk by joining forces with one of the factoring or
invoice
discounting companies who
are more active than normal in the Receivership market.
Naturally we know who these companies are and do not place business with any of them.
Do yourself a favour and avoid making a costly mistake.
Please see next page for details on concerns about the minimum annual fee
