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• 18 Apr

  CHOCs Business Finance For A Scottish Property Maintenance Company With HMRC Arrears And Ban On Assignment

  Property maintenance companies can find the number of invoice finance companies that will support them limited but in the case of this client that we helped, there were several additional complications.

  Chocs Business Finance For Property Maintenance With HMRC Arrears & Ban On Assignment

  Property maintenance is not something that all funders will handle, there were also several other issues that needed to be overcome. Typically this sector can be considered part of the construction sector which can complicate financing arrangements with some providers.

  Issues With Financing This Case - HMRC Arrears

  The client had already been rejected by one of the major UK banks due to having some HMRC arrears that were subject to a Time To Pay arrangement (TTP). They were also serving Scotland which required a local presence from any prospective financier.

  FundInvoice specialises in finding business finance for companies that have already been rejected or declined for funding elsewhere. This was a situation where we were able to assist where others had failed.

  Ban On Assignment Clause

  Additionally, the prime debtor - their major customer, had a clause in their terms and conditions that prohibited the assignment of their debts to another party. This is commonly referred to as a ban on assignment clause and this can be a problem for companies that want to assign their invoices to an invoice financing company.

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  Overcoming These Problems And Providing Business Finance

  Fortunately, we were able to introduce this client to an independent invoice financing company that was prepared to take a view on their issues and provide them with business finance. They were able to negotiate payment arrangements with the major debtor and provide funding against the invoices despite the sectoral issues and HMRC arrears.

  The client was successfully funded using a product known as CHOCs (customer handles own collections) which operates in a very similar way to invoice discounting.

  By Glenn Blackman