Tips to pick the right invoice financier - one size doesn’t fit all

Tips on Picking the Right Invoice Finance Provider

Posted: 2nd October 2018
With over 40,000 UK businesses choosing invoice finance to manage late paying customers and maintaining a fluid cashflow, there’s a wealth of providers to choose from.
 
Yet how do you go about choosing the right provider for you? After all, one size doesn’t fit all. What do you need to consider when picking an invoice finance provider?: 
 
  • Minimum Contract Term: The majority of invoice factoring providers will look at a minimum 12 month contract.
  • % Advance (prepayment): Providers differ in what maximum percentage they will advance - some will pay up to 80% whilst others, such as us, will advance up to 90%.
  • Service Fees & Charges: It is quite normal to be charged a monthly service charge on your factoring facility which could cover credit control. There will also be fees against the amounts advanced, deducted from each invoice you factor.
  • Monthly Volume: If your invoicing is sporadic, due to seasonal highs and low for example, look at a provider that considers a quarterly volume rather than monthly.
  • Minimum Turnover: Again, as you forecast your monthly/quarterly volume, ensure that you are able to commit to the minimum turnover required for your facility agreement. If you regularly turnover less than your agreed cap, your fees could out way any benefit. Your factoring provider should review this on a regular basis.
  • Specialist products: There are many factoring options to choose from, for example, invoice finance, confidential invoice discounting and selective invoice finance. This ensures there’s a tailored facility for your needs. Some invoice finance providers also specialise in products such as ICON (In Case Of Need) and Swift Funding.
  • Size Match: A smaller provider invariably provides a more personable service – instead of multiple Client Managers you should be appointed just one point of contact. Here at Calverton you are paired with a Client Manager, Client Executive and team. You’re more than just a number.
  • Optional products: Leading factoring providers can include Bad Debt Protection as part of your facility along with credit checks on your existing and new customers. Invoice factoring should also provide a credit control service as part of the facility.
  • Experience: Make sure your provider understands your industry. Some providers are ‘jack of all trades’ that may not fully understand the seasonality, circumstances and challenges of your business.
  • Customer Service: As well as providing outstanding customer service to you, your factoring provider should also be providing an exceptional service not only to you but to your customers as well.

You must ensure that before signing any contract that you fully understand your provider’s terms and conditions. At Calverton Finance our terms are transparent and honest.

So much so that 98% of our customers would recommend us. Call us for a free quote; 01908 268888.