Selective Invoice Financing

Selective Invoice Financing

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Does anyone have any recommendations who we can approach for selective invoice financing?

I'm the company accountant for a £10m+ business and we have tried our bankers who unsurprisingly are only interested in financing the whole of the debtor book.  

PM me if you have any personal experiences, either good or bad.

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By cpavett
08th Jan 2014 16:59

Why selective?

Why would you want to be selective? With invoice finance your fee would be driven by the facility limit and the usage so while the bank may want a debenture on the whole of the debtor book that does not mean that you have to draw down against the whole of the debtor book, you could have debtors of £4 million but only require £1 million, so using 25% would give a lot of security to the bank and would hopefully reduce your costs.  Typical arrangement fees should be between 0.5% and 1%.

Watch out for drawdown fees, some banks or asset finance companies charge you a percentage every time you draw down and this can become very expensive, some banks charge a fixed monthly charge, unless you are not going to draw down much the fixed monthly charge is usually better.

I've found Lloyds to be very good with invoice finance, I would steer clear of 'asset finance' based companies, they tend to talk a good talk when trying to sell to you but can be very aggressive with compliance once signed.  See the following article:

http://www.ft.com/cms/s/0/13714bb6-be3b-11e2-bb35-00144feab7de.html#axzz2ppKYsAdn

To be honest, you are going to struggle to find any funder that doesn't want a charge on the whole of the debtor book, and even if you could find such an arrangement the covenants would stop you using anyone else for the remainder of the invoices any way!

Your bank may be the best solution.

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By Steve McQueen
08th Jan 2014 18:58

Yes
Www.platformblack.com

I have no link to them other than having used them.

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