Tag Archives: interest rates

Weekly digest

The week completed, 24th April 2015

JMS

Interest Rates can vary hugely across both commercial and consumer borrowing. The Bank of England Base rate has been 0.5% since March 2009 which should bring borrowers access to cheap funds.

Consumer borrowers see some spectacular rates with annual percentages  reaching the thousands in the worst cases and in the commercial borrowing world there are some incredibly high rates too, giving business borrowers a far higher charge than may be appropriate or expected.

Within the invoice finance sector there can be an unhealthy masking of the true interest rate charged for funds used. One such example this week sees a business utilise funds at a described rate of Base Rate plus 2.5 (subject to a minimum base rate as determined by the lender).

The key point here is the ‘subject to a minimum………….’ line. When a rate is quoted thus its probably not unreasonable to expect the Base rate to be the aforementioned Bank of England figure. In this case the actual base was 7.5%.

What is frustrating is the opaque nature of the description and it ought to be incumbent on lenders to be clear on charges, rates and security. Sadly, within parts of the invoice finance community, there are massive discrepancies between the headline description and the reality.

Funders use a number of different ruses to hide the true charges. As an independent broker Factoring Partners is ideally placed and suitably experienced to guide a business through the charges, imposed by invoice financiers, including those that are a little less than clear.

 

 

Locally Stratford grinds to a halt this week end (as it does most days, traffic wise) to celebrate a well known birthday.

 

 

willshakespeare
Shakespeare

 

 

Weekly digest

The week completed, 13th February 2015

JMS

The tedium of a couple of weeks ago is but a distant memory as this week replicated last in being busy with some new enquiries. Talking with many invoice finance companies this week suggests there has been a real pick up in enquiry levels across the board, after a generally pretty quiet January.

The invoice finance world received a new single invoice funder this week with IGF entering this market. This type of finance is proving popular amongst businesses as it has a flexibility not evident in the more traditional whole turnover facilities favoured by the majority of invoice finance providers.

Rates vary pretty dramatically so it is worth looking around. Funding can be put in place very quickly and if a business has a strong, valid debt due by a creditworthy customer it may be worth exploring.

What businesses do have is access to a whole range of facilities some of which will suit and some wont. With this range comes the need for advice, there’s plenty of good advice about from experienced people but do ensure the adviser is genuinely independent.

Interesting to hear the Governor of The Bank of England this week talk about the possibility of inflation turning negative later this year and even if that didn’t happen continued low inflation may lead to a reduction in interest rates.

Base rate has been at 0.5% nearly 6 years now so the Bank doesn’t have too many options downwards….one of the reasons many say rates have been too low now for at least 2 years.

 

And so to Twickenham…..

 

rugby

 

Weekly digest

The week completed, 19th December 2014

JMS

xmas1

Not exactly a lot to report this week in the world of Factoring Partners apart from some good networking events both locally in Stratford-upon-Avon and in Birmingham (the latter named this week as one of the top 10 cities in the World by travel handbook company Rough Guide).

The year has been an interesting one from a business perspective, deals have been written and funding has been sourced for a number of businesses, not as many as may have been liked but perhaps more than may have been expected at the start of the year.

Next year will be dominated, at least until May, by the general election and possibly the remainder of the year too if there is no outright winner and a state of limbo results. We predict Bank of England Base Rate will stay at 0.5% at least until May with possible small (0.25%) rises thereafter.

Invoice Finance has new providers and there’s talk of more as well, we look forward to working with old & new.

In the meantime very best wishes to one and all for a Happy, Peaceful Christmas and a prosperous New Year.

Weekly digest

The week completed, 21st November 2014

JMS

From an enquiry point of view a strong week, especially in comparison to recent, quiet, weeks. Some interesting new prospects to progress offset by the first decision deferred by Christmas, a traditional year end event that affords decision makers a perfect opportunity to put a decision on hold.

As with last week many phone calls made and many businesses spoken to, most seem satisfied with current funding. Few complimentary words for the banks in general terms and RBS in particular must be getting fed up with a seemingly constant stream of fines being imposed upon them.

The Bank of Englands Monetary Policy Committee revealed that their November vote on Base Rate was 7 :2 in favour of keeping the 0.5% rate. The two who voted against proposed an increase to 0.75%.

The web site appears to have been found by spammers as opposed to google , time will tell whether the anti-spam measures work!

Weekly digest

The week completed, 31st October 2014

JMS

A quiet one with a distinct shortage of inbound calls, largely attributable, I suspect, to half term. Slow progress with a few invoice finance negotiations but an asset finance facility was completed for a small, local business which purchased a laser cutting machine.

When speaking to any business we always ask about access to finance and the ease, or otherwise, with which working capital can be accessed. Again this week those to whom we have spoken indicated funding was not an issue.

Interesting that Russia’s central bank has raised its key interest rate from 8% to 9.5% in an effort to combat inflation. Imagine that sort of rate in the UK and the repercussions on borrowers both business & personal

Interest rates

Interest rates on the rise?

JMS

INTEREST RATES

Bank of England Base rate was set at 0.5% in March 2009. With businesses usually paying interest at a margin above base rate arguably funding for business has never been cheaper. Recent noises from the committee that sets Base Rate suggest rises are on the way. These are likely to be in very small increments but businesses are still likely to see a rise in the cost of their borrowing.

Its prudent for businesses to budget using a variety of different base rates to enable the impact rises may have to be fully evaluated.

Bank base rate history is worth reviewing,………what impact would a base rate of 10% have.