Bank Invoice Finance – Is it Right for You?

As a brokerage we have been in business now for eight years. In that time we have seen an increasing demand for our factoring broker service. When we started out in business we were mainly an asset finance broker who would place customers for invoice finance on rare occasions. In the last three years our factoring brokerage has rocketed with new customer numbers nearly doubling year on year, so much so that our asset finance division is non-existent. The reason we mention this is to show we have a good grasp on the market and we are hopefully qualified to answer the question. Is your bank invoice finance right for your needs?

Bank Invoice Finance – is it needed at all?

The UK Invoice Finance market, currently has just over 43,000 customers across various funders, with around 50% of the market controlled by well known banks. So there is no question whether their services are needed, the real question is are their services that much better than other funders in the market or is it just down to clever marketing. The honest answer in our opinion is a little of both, are they good at keeping and managing their clients absolutely or they wouldn’t have such a large chunk of the market. Are all of their clients at the right home with their friendly “bank manger”, honestly we would argue possibly not.

As you can tell by what we have already mentioned above the market is certainly large and very competitive and with today’s online society, this has spilled over into our market. With more and more new enquires coming from the internet making the marketplace a more level playing field (to an extent anyway). With modern technology changing the way we “shop” and research things, this means that more and more savvy customers are comparing their options and making sure they have the best deal.

The bank certainly has their place in the market, however the old fashioned opinion of “my bank manager will help me” is changing and customers are becoming far more savvy because of easy access to information. There has never been an easier time to compare your options.

Factoring can help all kinds of businesses, as long as you raise an invoice to another business then you are eligible to get factoring. For this reason some industries are classed as a higher risk and for this reason it is always wise to look into other funders and not just take what you are given.

Also the phrase “all your eggs in one basket” seems relevant, if you have your business and personal account with them, your Factoring facility and your mortgage for example. If you need additional help and your business account is not in the best state or you are having issues as a business having all your finances under one roof isn’t such a good idea.

We hope this blog has been of some use to you and has given you a little insight as to how a third party company could help you. As always if you have any questions please don’t hesitate to contact me.