factoring case history
Factoring Solutions were approached by a company turning over £4m with the benefit of a non recourse factoring facility with one of the bank owned factoring companies. Having suffered a substantial bad debt the factors were loathe to fulfil their obligations and pay the client anything as the balance was above the underwritten limit and it took quite a lot of "persuasion" before they paid out the insured amount. To rub salt into the wounds the factor insisted that an independent accountant be appointed to run the slide rule over the company to ensure that they were still solvent and debited their account with £6,000 to pay for it. The company quite naturally feel that the client / factor relationship has been destroyed and despite the fact that it will cost them a significant sum to switch they approached us to find a replacement facility with a more commercially minded factor. Not only have we done this but we have also sourced a six figure trade finance facility to run in conjunction with the non recourse factoring facility as well.
The other interesting aspect to the the above case history is that it was the third company that had approached us within the space of two months complaining about various aspects of the service from this well known bank owned factor.
Factoring
Factoring is now considered to be mainstream lending and has replaced the traditional bank overdraft in many cases but unlike other forms of funding, factoring includes a large element of service and whilst one might think that all factors are the same the truth is very different with many of the major players offering a very poor quality of service that is as likely to hold back their clients' growth as it would advance it.
As we have some very real concerns about the way some of the well known factoring companies operate we have set out some of the pitfalls including details on selecting the factoring company and why the cheapest factoring quote often works out more expensive in practice.
Invoice Discounting
Invoice discounting is currently being used by almost 14,000 companies generating combined turnovers of nearly £115 billion and it is this method of invoice finance that is experiencing the most growth at the moment. Our reservations about the activities of some invoice discounters are as valid as in factoring and we would be grateful if you could click on the link to see our areas of concern about invoice discounting
Trade Finance
Trade Finance is an area of business funding that co-exists alongside bank overdrafts, factoring and invoice discounting providing specialist finance to facilitate trade and you can read more about the types of facilities that we can arrange by clicking on the link for trade finance pages
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