Invoice Finance should I switch or stay?
A commonly asked question here at Simply Factoring Brokers, is my factoring/ Invoice discounting facility the right one for me or should I look at my options. At this point we then ask them some details about their contract and what it entails. We evaluate their current facility and go through all their options with either moving or just making some tweaks to their current facility to improve it.
Once someone has asked if we think they should stay or switch we ask who it is they are with and how long they have been there. What are their reasons for coming to us in the first place, reasons such as they’ve fallen out with their client manager, it may be that they feel they are always unavailable or can’t agree on important decisions. Not getting on with your client manager can affect your contract in a big way although it shouldn’t, it does. There is always a variety of reasons for people questioning their facility but one reason that comes up more than often than not is cost.
The problem with invoice finance in part is the lack of knowledge available to you as a customer, most businesses tend to think that the best and safest option to secure their new invoice finance facility is to first go to their bank. In part there is nothing wrong with this as that is what the banks are there for, however if you are new to invoice finance or have just started up a new company and you are unsure of what the costs should be then some funders will charge you a higher price unless you crunch them on the numbers.
Two of the biggest funders in the market are high street banks and these 2 funders alone control around 40% of the entire market. Now there is nothing wrong with these funders at all, however the point we are trying to make is people go with the name, the brand that they know and trust. Again let me point out there is nothing wrong with this, however the invoice finance market is made up of around 70 invoice finance funders from names you would have heard of like Lloyds, Barclays & Bibby’s to funders you wouldn’t have heard of like Aldemore, Ashley & SME.
This is where we come in as we know the funders in the market, we know what funders will best suite you as a customer. Coming to a broker doesn’t cost you a penny and you get the advice you need and put in the right direction in regards to which funder is best suited to you and your company.
Another common reason we come across when businesses come to us asking to switch invoice factoring companies is that they are being limited by their current lender, maybe you are being limited by the credit limit for an individual customer, or your IP (advance rate) has been reduced because your industry has suddenly become a high risk industry. A different lender may be able to offer higher limits. It may be that your business has outgrown the current facility you have. This could mean that your lender does not have the capability to advance you the cash you require. Whatever the reason we have heard it before and regularly transfer to a more suited facility at a much better cost.
So if you’re reading this and you think that you could benefit from a quick five minute chat from Simply Factoring Brokers then call us and we can help you decide what the best route of finance is for you for take.