factoring and credit insurance

We were approached by a small engineering company turning over £350,000 per annum with a core of about 12 customers but with one major PLC customer providing 40% of their business. They were looking for a factoring facility with bad debt cover.

The company banked with HSBC so approached their factoring division first of all. HSBC offered them an insured facility but refused any insurance cover on the major customer despite it being a substantial PLC. We suggested that they would be better off talking to one of the independent factoring companies who would offer a recourse factoring facility and we could bolt on a separate credit insurance policy.

This has the advantage not only of flexibility but frequently a good credit insurance broker with his intimate knowledge of the market will know which underwriters to approach for each specific deal and can arrange better individual limits.  Even so we were somewhat surprised when the insurers agreed a credit limit of £400,000 on this particular company.

Unfortunately it's common practice when looking for finance to approach the bank without looking around to see if there are more suitable alternatives and in this case we sourced a fully insured factoring facility at the same cost as they would have paid their bankers for a "halfway house" facility.

We probably have more years of factoring experience than any other broker so why not contact us for an informal chat without any obligation and see what we can do for you.