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• 15 Oct

  How To Get Out Of A Factoring Arrangement

  In many of the cases that we deal with factoring is seen by our client as an excellent solution for their business, the provision of cash flow through early payments against outstanding invoices and the included credit control debt collection support that is part of the factoring arrangement can be huge benefits.

  However, in some cases we deal with clients that are using factoring but want to know how to get out of a factoring arrangement as they do not want the factoring company undertaking the credit control and the associated additional costs. In many cases however, they cannot afford to do without the funding and so need an alternative source of finance to replace the factoring facility.

  There are solutions available. Confidential Invoice Discounting provides finance against our client's invoices but the client retains the credit control function in-house, hence the cost can be much less that the cost of factoring. Furthermore, the facility is, as the name suggests, completely confidential so that our client's customers don't even know that our client is using it. Even the payments from our client's customers are paid into an account in the name of our client so the fact that they are using invoice finance is completely invisible to their customers - similar to an overdraft or loan.

  In some cases clients may have been told that they are too small or not financially strong enough for Confidential Invoice Discounting. Fortunately at least one of our invoice discounting partners has specifically designed Confidential Invoice Discounting facilites for businesses that need to access funding of as little as £20,000. They can also offer a fixed monthly fee so that the costs are more predictable than those for factoring.

  If you fall into any of these categories and are interested in Confidential Invoice Discounting as an alternative to factoring please contact my team.

  By Glenn Blackman