Invoice Factoring Solves a Company’s Cash Flow Problems and Reduces Stress
In our experience, many smaller businesses are not very good at managing their cash flow. The invoices go out and, quite often, they are paid late, which causes stress and cash flow problems. This case study looks at a company that we helped in that position with a £180,000 invoice factoring facility.
Why Did This Client Need Invoice Factoring
We were approached directly by this company. They provided marketing support and branding services to their clients. They were handling their own collections of money owed on an ad-hoc basis, and had no formal procedures in place for chasing outstanding invoices.
Typically, the chasing of debts usually occurred when the business was running short of cash. Worse still, they then had to chase their customers aggressively to get paid. Often this led to further lengthening of payment time scales getting paid, resulting in stress and panic as the cash flow situation continued to worsen.
How we Responded to Their Invoice Financing Needs
Senate Money were chosen by the client because, with our knowledge of the market, we could introduce an invoice factoring company that offered a simple, one-stop source for both funding and collecting invoices. This meant cash flow would improve and it would also save the time and money (and stress) that was being invested in getting their clients to pay.
We arranged a £180,000 full invoice factoring facility, advancing 85% of the invoice value on a non-recourse basis. This gave the client a monetary cushion and a consistent, predictable cash flow, enabling them to conduct their business in a more sustainable manner. It also reduced their own administration costs from because they no longer had to chase customers for payment.
The client was happy in the knowledge that they would not be responsible for any losses incurred, including any additional collection charges or solicitor’s fees if a debtor did need pay.
Contact Us if Your Business Needs Invoice Financing
The customer also asked us to meet with his accountant before he signed the agreement, which we were happy to do. The accountant was so impressed with our Invoice Factoring and Invoice Discounting product knowledge and fresh approach to invoice finance that he now recommends Senate Money to other clients who could also benefit.
If your business is in need of an invoice finance arrangement, whether invoice factoring or invoice discounting, contact us or call us on 01675 433878 for an initial chat.