Government urging more companies to look at invoice finance

Vince Cable has commented that Britain’s businesses can’t grow without access to funding and they need alternatives to traditional forms of bank credit and the Government actively wants to see a shift to non bank lending.

Bank funding to the SME sector has shrivelled since the banking crisis creating a cash flow crisis that is stifling small firms.

Mr Cable’s comments co-incided with the launch of a guide to alternative sources of financing, published by the Confederation of British Industry (CBI) which includes factoring as well as other forms of invoice finance.

Hopefully more companies will look at factoring as a viable alternative to bank overdrafts and loans now that the Government has indirectly given this form of finance it’s seal of appropal

Get your factoring facility now before it snows

According to a press release from Close Invoice Finance a recent survey that they have conducted reported that a number of companies in the West Midlands admitted to being ill-prepared for the disruption that a bad winter will bring.

The local head of Close stated that “If businesses aren’t prepared for the worst, it can have a serious effect on cashflow which everyone knows is the lifeblood of all businesses.

“The key for getting through one of the worst winters we’ve seen for years is preparation. Failing to plan could have a serious impact on your business and result in it being unable to trade.”

He went on to state that his “advice to businesses would be to have in place suitable funding arrangements to ride out any potential cashflow problems associated with the weather. Invoice finance is one option. It enables businesses to access cash immediately, easing any financial pressure and allowing companies to get on with what they do best – running their business.”

So now we know, if it looks like it’s going to snow, contact your friendly factoring broker and get your factoring facility in place before it has time to settle.

Demand for Invoice Finance Grows

Well it is according to a press release sent out to all and sundry by Simply Business. Apparently they are seeing “an increase in small businesses seeking alternative sources of credit such as invoice discounting and factoring as banks refuse to give credit.”

I wonder where they are placing this increase in business as all of the factoring companies that I have been talking to say that new business is flat at the moment whilst the broking community are all looking a bit glum too. Even the ABFA try and put a positive spin on figures that show a constant decline in numbers of SME businesses taking advantage of the various forms of invoice finance.

I have always taken the view that if I have nothing to say, I say nothing – perhaps that’s where I’m going wrong 🙂

RBS announce £3bn extra funding for SMEs

It was announced today that RBS would be making available an extra £3b in the SME sector and the press release even mentioned that this would partly be used in their invoice funding division.

Judging by recent activity it would seem that rather than tell the world that their factoring and invoice discounting divisions are not interested in new business they are continuing to quote but at such uncompetitive rates that no-one in their right minds would take up their offer.

Just this morning we had an enquiry from a well established firm of recruitment consultants turning over £1.7m and with a healthy balance sheet who were looking at invoice finance not because they desperately needed the money but to be prepared for the inevitable hiccups in their cash flow. Their outstanding debts were £300,000 and they were looking to raise a maximum of £100,000 as a stand by facility.

We approached one of the independent factoring companies known for both the excellence of their service as well as competitive pricing and they quoted a rate of 0.45% with a minimum of £6,000 for a confidential invoice discounting facility whilst the company approached RBS Invoice Finance directly as they banked with RBS who quoted them exactly double.