Invoice Finance - Beyond Headline Rates

On some of my recent LinkedIn posts people have commented about their frustrations with invoice finance. Some of the points raised are common issues that many of our clients raise. Things that clients often feel were not explained when they originally set up the facility.

I'd like to look at these issues in detail over a series of weekly newsletters.

The frustrations probably fall in to two categories. Unexpected charges and unexpected restrictions.

The charges obviously mean that the facility ends up costing more than they originally expected. This has an impact on profit margins and ultimately the bottom line of the business. This can be frustrating and additional fees beyond the headline rates of the service fee and discounting fee can be significant in some cases.

Restrictions can severely impact on the amount of working capital that any facility generates. If you end up with less than expected this can restrict growth and in some instances cause business failure. It is imperative a facility is structured properly to meet your needs.

Over the coming weeks I will aim to cover these topics in bite size chunks so that you can set up an invoice finance facility properly and avoid these frustrations.

It was also raised on my posts that invoice finance is not for everyone. I would agree with that. I will also try to cover when it is suitable and it's limitations.