invoice discounting/factoring and alternatives

invoice discounting/factoring and alternatives

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Discussion

skwdenyer

16,896 posts

242 months

Wednesday 14th November 2007
quotequote all
A business I'm involved with has CID (confidential invoice discounting) with Leumi ABL (http://www.leumiabl.co.uk). This is a non-recourse agreement, with insurance covering all approved debts (i.e. those who you can get a credit limit on) subject to a (small) excess.

I can't give specifics of charges due to confidentiality clauses in the contract, but suffice to say that they were very competitive. But of course each quote will vary depending upon the quality of the debt.

However they do not do our credit control - I've never been on the receiving end of a factor's credit control department who were worth a damn, so I wouldn't pay them to do it either.

To those nay-sayers, to be honest some businesses simply can't operate without factoring or a rich "daddy". Not every business has predictable turnover, not every business wants to court clients only to turn down their business for lack of financing, and so on. To each their own.

One thing to bear in mind: factors may not want your house, but they'll usually insist on Directors' personal guarantees, as does everybody these days:-)

Oh yes, finally: most factors will demand an annual audit, even if your business is below the (now quite large) audit threshold, so you may have to add that cost into the equation.