Traditionally business owners have turned to their bank manager when proposed expansion or investment has meant that they require additional funding for their business.  The bank manager has normally responded by granting an overdraft facility or agreeing a medium term loan.

However the major high street bank are looking to shore up their severely weakened balance sheets and part of this process has meant a reluctance to lend (particularly to cash-strapped owner-managed businesses) and a significant hiking in their fees and charges in the process.

Invoice discounting provides working capital funding to a business secured on the debtors (outstanding invoices) of that business.  The benefits compared to an overdraft facility are clear:

1. More generous funding criteria – up to 80% of outstanding debtor balances.
2. Less personal security – whereas overdraft is often secured against personal property Invoice Discounting require little or no personal security.
3. Equivalent or even lower charges – with bank interest rates rocketing Invoice Discounting now looks very attractive in comparison.
4. Less negotiation – rather than constant and protracted negotiations to increase limits the Invoice Discounting facility grows with the business’s working capital requirements.

These facilities are completely confidential and easy to manage.

One perceived downside of these facilities was the fact that the client was tied in to a long term contract, but Calverton Business Support are now offering a rolling monthly facility which can be terminated at any time.

If you would like more information on these facilities or an indication of terms and charges then please contact me on markbyrne [at] calvertonfactors [dot] co [dot] uk or telephone me on 01908 268888.