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Invoices financed by company 2

How would I deal with this?

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I have met with a potential new client this morning. The client has 2 companies lets say A and B.

Company B sells and invoices products to customers. Having looked at the documents Company A has finance terms in place (with a finance company).

Company B receives payment for the invocies from the finance company less a 3% comission. 

Company B has invoiced it so it is their sale and they have been paid it. The payment is received directly from the financing company but the financing system is set up in Company A name.

So will it be a case of sales raised, paid off so no debtor less a 3% comission charge from company A to company B.

What are the implications with it being company A being responsible for the credit lending? The financing is set up through company A who have to report the lending to the FCA through Gabriel. Through discussions with the client they did not realise this was an issue and are now looking at changing over the credit agreements going forward. Company A has therefore acted as a lending facility to facilitate payments of company B sales.


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19th Jun 2018 11:42

So the advances go from the finance company to B, but A is strictly responsible for repaying it?

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