Tag Archives: weekly factoring blog

Weekly digest

The week completed, 5th June 2015

JMS
Need help with forecasting cash requirements
Predictable Cash Flow!!

Having operated as an independent broker for over 18 years now the predictability that used to exist has completely disappeared. It was always reasonably certain, in years gone by, which months would be busy and which would be quiet.

Currently the trend is seemingly a reversal of historic norms and whilst this is of no real consequence, it is important businesses have the capacity to adapt, whether their own particular market is experiencing expansion or contraction.

Even if the market is unpredictable a business can ensure predictable cash positions by careful working capital management.

Invoice finance is an ideal product to accommodate periods of growth with the simple fact that the facility grows in line with sales facilitating this. A few months ago we concluded a facility for a small recruitment business, specialising in the temporary placement of catering, hospitality and exhibition staff.

The business has no physical assets and the Directors have limited personal assets. Their bankers were not prepared to help with finance. As we entered spring and early summer the business had a library of temps they could place and a strong network of clients in need of temporary staff.

The temps, naturally, want to be paid weekly and the clients want to pay after a minimum of 30 days from invoice date. This gap is plugged perfectly by invoice finance.

This week I spoke to the client and it was nice to hear their ringing endorsement of invoice finance. They have been able to place temps without worry. When they raise an invoice they receive 80% of its gross value straight away, giving suficient funds to pay, and subsequently keep, their temps.

They do not have to worry about a fixed limit facility, such as an overdraft, as the type of facility they have grows in a way that mirrors exactly their own sales

The nature of their business is both unpredictable and seasonal but the invoice finance facility accommodates both these potential problems.

We will happily help with sourcing finance and the preparation of efficient cash management tools. Just give us a call or email [email protected]

Weekly digest

The week completed, 20th March 2015

JMS

eclipse

 

A week that appears to have gone by in a blink of an eye and hopefully the efforts put in will result in a number of business finance issues being resolved. An interesting assortment of businesses have been spoken to this week from a kitchen utensils & equipment distributor to a construction company specialising in the refurbishment of night clubs.

As mentioned in previous blogs funding is available for viable businesses managed by individuals with appropriate intent. One business that has crossed my desk this week displays none of the latter and has a history of relationships with funders that have not ended well. It comes as no surprise that funders are now wary in this case and, quite rightly, have declined any involvement.

Enquiries for invoice finance have been evident this week although my own experiences as a broker are anecdotal and not necessarily reflective of the market as a whole.

The backdrop of the forthcoming election is not currently casting a shadow over businesses and the possibility of a state of limbo, immediately post election, is not a deterrent to decision making. The budget seemed to leave many none the wiser and as usual it would seem the devil will be in the detail which will only materialise in time.

As the election campaign gathers our elected representatives appear to behave in a less edifying manner each day. Its always worth remembering that you can tell a politician is lying very easily simply by seeing if their lips are moving.

I have had dealings with 2 MP’s over issues that affected business finance and the lack of commercial and common sense they displayed was quite staggering. I expect further evidence of their collective lack of sense will be in plentiful supply over the next few weeks.

Weekly digest

The week completed, 6th March 2015

JMS

A week dominated workwise by lengthy discussions with an overseas business looking to sell product into Europe,  not including the UK, and seeking funding and administrative support. A challenging case but subject to certain conditions one that should end successfully.

Less successful, depending which way its viewed, centred around a client and a new, potentially lucrative, order. In short, the client was approached by a potential new customer, a newish business with limited information available. Unfortunately a bit of detective work revealed a number of bust businesses in the background with creditors left with next to nothing.

The episode shows the merit in research which in this case sadly diluted the initial excitement in winning a new customer. It may still work but will involve a pricing change and a significant amendment to terms to include a large deposit.

The week ends with a visit to the capital and a dinner at The House of Lords, hopefully I will remember which way to hold a knife and fork.

 

parliament

Weekly digest

The week completed, 27th February 2015

JMS

With bankers never out of the news these days it was interesting this week to meet up with a couple of ‘alternative’ funders although its not really clear why the word alternative is used.

Some time ago when a business secured an order from a decent customer but needed funds to fulfill the transaction a bank used to make available overdrafts. A Bank manager would use his or her experience in evaluating the customer and the proposed transaction before making a rational decision. The banks seem to have lost the ability to make rational, quick decisions leaving something of a gap, being filled by ‘alternative’ funders.

Whilst the names may not be familiar the type of facilities being offered are and sensibly priced money is readily available to businesses with a cogent proposition.

Meanwhile the banks with which we are all familiar continue to occupy front page space for assorted reasons few of which have anything to do with traditional banking.

The new business world within invoice finance is full of businesses contemplating a move from one funder to another. There can be real merit in switching and more and more businesses view their funding arrangements as a commodity in the same way a consumer may regard their utility supplier.

Significant differences exist between funders, not just between the banks and the independent sector but amongst the independents material variations are evident. Its an old message but nevertheless a valid one, look for quality, independent advice.

…and so to Dublin

 

rugby