Shopping around for invoice finance, factoring and invoice discounting deals

Its a matter of course that when it comes to home insurance or car insurance, we all shop around, upon renewal, for the best deal each year but sadly, the same isn’t true when looking at the cost of borrowing?

In the current climate too many business owners are somewhat grateful just to have a finance facility in place with their bank and the concept of challenging the cost is a no go. Banks have somewhat of a stranglehold and are the proverbial brick wall when it comes to haggling on cost.

So whilst the market for bank borrowing is uncompetitive, resistant to change, poor value for money etc, what about factoring agreements and other invoice finance facilities?

Most factoring and invoice discounting deals tend to be written around a 12 month term in any case so the framework and ability to switch to a cheaper or better facility is a whole lot easier and already lends itself to the insurance renewal model, with an annual review. In our experience – spanning more than 30 years – factoring agreements signed in the early years of a company trading can be comparatively more expensive as to when the customer has more trading history with which the funder can base their risk analysis on.

So it pays to shop around year on year.

Other factors such as, projected sales being exceeded or possibly not met, the industry/sector you operate in performing better or worse, or becoming more or less riskier to operate in, coming out of or into a recession etc etc will all have an effect on the rate you the customer will ultimately be offered. Either way, sometimes, all that is needed is a little fine tuning in order to get a) a better rate for your invoice finance facility, or b) a better packaged facility more suited to your business model.

If you are in the market for invoice finance for the first time, or are considering shopping around for the best deal for you, Factoring Finance Ltd have a UK wide, broker network, able to source the best deals from many funders. We are independent, and as such are not tied into using any particular funders but the one that is right for your business.

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