The factoring company debenture

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.

This debenture gives the factor the right to appoint an Administrator or Receiver and many factoring companies have 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 Administrators 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 their invoices could be placing their company at unnecessary financial risk by joining forces with one of the factors 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.

The next page details our concerns on the way that some factoring companies abuse the Minimum Annual Fee so please click on the link to read our worries about the minimum annual fee