Factoring

[shaunatsf]

Hi,

I was wondering if anybody could recommend a good factoring company. We have gone to our bank but they have charge after charge for it and it is really expensive. To give you an idea they have a fee to sign up for the service, then you pay a fee per client you send to them, then they have a fee per invoice and then percentage of the actual total. All this and then there is a monthly fee to the bank for the service. Far to many 'fees' if you ask me.

Does anybody else use a reputable company that has a more straight forward way of charging you?

Thanks

 

[Snap Executive]

Hi,

I use a company called Alchemy Payments and Factoring. Would definitely recommend them. PM me if you want more info.

Cheers
Jim

 

[CDAPartnership]

Depending on which industry you are in, what your turnover is, how long you have been trading, what your client bank is like, there are a number of invoice discounting or factoring companies outside of the normal banks that could suit your requirements.

Beware all of them charge fees, "you only get what you pay for in life"

In no particular order without recommendation:

Venture Finance

Forshaw Associates Ltd

Bibby FS

 

[E Storey]

THINK VERY SERIOUSLY before you go for a factoring arrangment.

As a debtor, I have found factored companies really difficult to communicate with, They are famous for chasing debt that has already been paid and almost impossible to get any info like "what is this invoice for?" or "can I have a copy invoice" out of, often delaying payment rather than speeding it up.

On the other side, trying to get info out of your factor about who is paying-up is really difficult, almost requiring the same time as doing your own credit control.

Then fees of say 4.5% are often subject to a monthly minimum of say £500 which could make the percentage retained more like 10%.

It also starts alarm bells ringing about your financial position, making future work less likely. Should you wish to get a loan for say a new van, you may find yourself automatically rejected simply because of the factoring agreement.

If you do not manage your factor properly it really can turn into a nightmare!

 

THINK VERY SERIOUSLY before you go for a factoring arrangment.




It also starts alarm bells ringing about your financial position, making future work less likely. Should you wish to get a loan for say a new van, you may find yourself automatically rejected simply because of the factoring agreement.

Utter nonsense; you would never get a loan rejected because you factor.

Some people hold onto the archaic belief that companies only factor because they are in trouble, but fortunately most people have moved on from that.

The only thing I would agree with is that you make sure you understand all the costs involved.

 

[E Storey]

Seen it happen just last month......

 

[Gillie]

THINK VERY SERIOUSLY before you go for a factoring arrangment.

As a debtor, I have found factored companies really difficult to communicate with, They are famous for chasing debt that has already been paid and almost impossible to get any info like "what is this invoice for?" or "can I have a copy invoice" out of, often delaying payment rather than speeding it up.

On the other side, trying to get info out of your factor about who is paying-up is really difficult, almost requiring the same time as doing your own credit control.

Then fees of say 4.5% are often subject to a monthly minimum of say £500 which could make the percentage retained more like 10%.

It also starts alarm bells ringing about your financial position, making future work less likely. Should you wish to get a loan for say a new van, you may find yourself automatically rejected simply because of the factoring agreement.

If you do not manage your factor properly it really can turn into a nightmare!

Should you dig deeper in to lenders present behaviour, you will find that it was NOT the factoring that meant the loan application was turned down, think you will find other things such as unaffordability and credit rating and so forth that made the lender think twice.

It is very rare that any lender or new client will be turned away by factoring, otherwise think you would find that factoring would have disappeared off the scene many moons ago - something it aint going to do.

 

[E Storey]

I take it you sell factoring?

 

[Gillie]

I take it you sell factoring?

And?? My site mentions factoring, it also mentions bookkeeping, marketing, IT support, hosting and PR and Graphic Design - am I thus not allowed to comment on any of these other issues either?

If I wished to sell my services, I would have just sent the guy a pm etc - however, when asked about factoring, at the moment, I tell people to go speak to Ian J - member on here who deals with it.

I was merely advising anyone reading that your comment about it being taken badly by lenders was tosh - as I deal with business finance daily.

 

[E Storey]

Well, clearly you know best then!

My client must be lying about the banks reasoning for refusal of loan, and the consumer decisions not to use companies because (at least in part) of their factoring agreements must all be in my imagination!

Not to mention the number of customers that ring up asking their their own invoices not be put through a factor (on pain of removal of their custom) because they can't deal with the banks constant chasing of debt that is not owed.

Factoring may well be a good option for some, but for a small disorganised business with cash flow problems, it is often completely mis sold as a panacea, when in fact all it delivers is significant extra administrative burden and a high cost cash advance.

 

[Ian J]

Well, clearly you know best then!

Gillie does have a great deal of expertise in factoring as do I and your post looks to me like a mixture of misinformation, generalisation and exaggeration.

 

Well, clearly you know best then!

My client must be lying about the banks reasoning for refusal of loan, and the consumer decisions not to use companies because (at least in part) of their factoring agreements must all be in my imagination!

Not to mention the number of customers that ring up asking their their own invoices not be put through a factor (on pain of removal of their custom) because they can't deal with the banks constant chasing of debt that is not owed.

Factoring may well be a good option for some, but for a small disorganised business with cash flow problems, it is often completely mis sold as a panacea, when in fact all it delivers is significant extra administrative burden and a high cost cash advance.

I have been a leasing/finance broker for 20 years and have NEVER seen a deal declined because the client used factoring.

if I am ever approached by someone claiming a spurious reason for decline, I find a few further questions will generallly change the picture somewhat.

 

[Simply Business]

Factoring is not always the best solution and it can be expensive.
Bibby, Hitachi and others all offer factoring service. We work with Touch Financial who give advice in what factoring service is right for you.

If you want help from them, fill in this call back form: http://www.simplybusiness.co.uk/finance/invoice-finance-form/