Factoring case history -
construction industry
We were approached by a company
involved in the construction
industry with severe cash flow
problems and needing to raise
funding from the £60,000 outstanding
debts. Although not the easiest or
glamorous of factoring deals, we
introduced one of the more flexible
factors who had a close look at the
business and found that the
outstanding debts were full of
disputes and retentions and that
only £15,000 of the total was
factorable. As it seemed clear that
this company was insolvent due to
the huge amount of outstanding trade
creditors and that the clean debts
of £15,000 wouldn't provide
sufficient funding to save the
company, the factor declined to
offer a facility.
We were somewhat shocked a couple of
weeks later to hear that this
company had been offered a facility
by one of the high street bank
factoring companies. The level of
funds provided will be insufficient
to stave off action by the creditors
and the additional burden of
factoring costs will just serve to
hasten the demise of this company.
Caveat emptor.
Invoice
discounting is currently being used
by almost 14,000 companies
generating combined turnovers of
nearly £115 billion and it is this
method of invoice finance that is
experiencing the most growth at the
moment. Our reservations about the
activities of some invoice
discounters are as valid as in
factoring and we would be grateful
if you could click on the link to
see our areas of concern about
invoice discounting
Trade Finance is an area of business funding that co-exists alongside bank overdrafts, factoring and
invoice discounting providing specialist finance to facilitate trade and you
can read more about the types of
facilities that we can arrange by
clicking on the link for
trade finance pages
Factoring Invoices
UK
5 Torridge
Tamworth
Staffs
B77 5QL
Tel : 01827 707680
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