When you have gone through the process of arranging an invoice finance facility, the temptation can sometimes be to just leave it as it is. There are, however, many good reasons, for keeping the facility and your provider under constant review. Here are our top 5:
1. Reduce costs
Many invoice finance users are paying too much for their facility. This may be because their turnover has increased, the facility was set up at a time when prices were high or perhaps the risk profile of the business was higher than it is now.
Many businesses also focus on headline rates when setting up a facility and only understand the true cost of additional fees or disbursements once the facility is up and running.
2. Increase cash generation
A lot of invoice finance users are not benefiting from the full amount of cash that they could be. Their prepayment may be too low, the facility limit may be too low or there may be restrictions such as concentration caps on the facility. The good news is that this can be improved.
3. Poor service levels from your lender
We speak to a lot of businesses that are receiving poor service levels from their existing invoice finance provider. Given that you are paying good money for a service this should not be tolerated. There are plenty of lenders that provide good service levels at a fair price.
4. Existing lender cannot support your business
Some lenders can only fund businesses up to a certain level or fund certain types of businesses. If your business has outgrown your existing lender or has taken a change of direction that the existing lender cannot support, it is time to find a new finance partner.
5. Additional facilities required
It may be that you require additional borrowing to finance your growth. If your existing facility is a stand-alone invoice finance facility you may wish to consider a stock finance or a trade finance facility. Beyond a stand-alone invoice finance facility are a variety of solutions to meet your cash flow requirements.
To discuss the funding options available to your business. Please do not hesitate to contact us on 0161 280 4220 or lynnew@regencyfactors.com
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