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• 15 Jul

  Replace Your Cancelled Invoice Finance Facility

  We have just been able to help a small steel fabrication business that was using a selective invoice finance company, that wanted to cancel their invoice financing facility.

  Replacing Cancelled Invoice Finance

  The business deals with a number of construction sector customers, and hence a lot of their sales are billed via applications for payment, rather than invoices. The use of applications for payment, which is commonplace in the majority of construction sector businesses, means that there are only a limited number of funders that will be able to help construction sector companies.

  Construction Sector Applications For Payment

  Most traditional invoice finance companies will only deal with transactions billed via sales invoices, and most stay clear of the construction sector due to the additional risks associated with staged payments and offsets associated with ongoing project work.

  Poor Financials But Looking To Grow

  This particular business had been using a selective invoice finance facility from a well-known provider, but a downturn in their trading performance had meant that their latest set of financials showed a small trading loss and a reduction in their tangible net worth to almost nothing.

  Whilst many invoice finance companies will be prepared to overlook poor financials as they rely upon the book debts for their security, in this case this particular funder wanted to cancel their client's facility, and so their client agreed to seek an alternative replacement invoice finance arrangement.

  We were happy to assist and introduced them to one of our panel of selective invoice finance companies, who were prepared to fund both their sales invoices and applications for payment to the construction sector. Furthermore, the funder that we introduced was prepared to take a view on their historic trading financial accounts, as the company was expecting to grow, and hence needed the benefit of funding against their sales invoices to facilitate that growth.

  Different Invoice Finance Companies Take Different Risk Stances

  This is another case study example that demonstrates how different invoice finance companies will take a different risk stance with regard to funding a particular business. Anyone who uses invoice finance, and is facing having their facility cancelled by their existing invoice finance company, should contact us as there is every likelihood that an alternative funder will be prepared to provide a replacement facility. It is very common for different funders to take different stances regarding the risk associated with a particular prospect - just because one company wants to cancel your invoice finance it does not mean that others will not want to provide replacement funding.

  By Glenn Blackman