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Business Finance Online
Invoice Factoring & Invoice Discounting to Ease Cash Flow
1st October 2003
FSB states 25% of businesses fail but what can be done?
The Federation of Small Business recently released some alarming late payment figures:
Four years ago the government introduced legislation which attempted to tackle this problem. By law suppliers are allowed to charge interest rates of 8% OBR on all debts aged over 30 days and charge recovery fees for late debts. This has not worked.
Why hasn't it worked? If your key relationship pays you late, would you be willing to place your company's future in doubt by rocking the boat?
Key strategies to ease cash flow:
Who uses invoice factoring & invoice discounting marketplace?
We are often asked whether a company will be offered invoice finance. There are some basics to being suitable:
Here are some examples of the type of company who used our marketplace last month:
Are banks really entitled to your book debts?
As we suggested in previous editions, it seemed that a clear precedence had been set and that banks would not take priority as preferential debtors over employees and VAT payments. However NatWest recently appealed and won such a case.
This case may be taken to the House of Lords on a final appeal and there will be more to come. For the meantime it looks like the banks are winning.
Is this good for small business? This ruling means banks will be able to continue controlling a majority of the lending market via overdraft lending. This removes the ability for other smaller lenders to compete, so reducing competition and may mean increased prices.
What should you do? Always compare your bank with what is on offer from other providers. ?Don?t keep all your eggs in one basket? is sage advice for finance planning as this mitigates the risk of someone else deciding the fate of your company.
Compare business finance solutions at the Business Finance Online Marketplace
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