Five Reasons to Change Invoice Finance Provider

Time to change invoice finance provider

When you have gone through the process of arranging an invoice finance facility, the temptation can sometimes be to just leave it as it is. There are, however, many good reasons, for keeping the facility and your provider under constant review. Here are our top 5.

1. Reduce costs

Many invoice finance users are paying too much for their facility. This may be because their turnover has increased, the facility was set up at a time when prices were high or perhaps the risk profile of the business was higher than it is now.

Many businesses also focus on headline rates when setting up a facility and only understand the true cost of additional fees or disbursements once the facility is up and running.

The good news is that by undertaking a full market review costs will almost certainly be reduced. This means more profit on your bottom line.

2. Increase cash generation

A lot of invoice finance users are not benefiting from the full amount of cash that they could be. Their prepayment may be too low, the facility limit may be too low or there may be restrictions such as concentration caps on the facility.

The good news is that this can be improved. We work with clients to maximise cash generation by ensuring limits and prepayment percentages are maximised and any restrictions on a facility are removed.

3. Poor service levels from your lender

We speak to a lot of businesses that are receiving poor service levels from their existing invoice finance provider. Given that you are paying good money for a service this should not be tolerated. There are plenty of lenders that provide good service levels at a fair price.

If you have specific service issues these can easily be addressed.

4. Existing lender cannot support your business

Some lenders can only fund businesses up to a certain level or fund certain types of businesses. If your business has outgrown your existing lender or has taken a change of direction that the existing lender cannot support, it is time to find a new finance partner.

The good news is that by finding a more suitable funding partner you will be able to tailor the new funding to your new requirements. This should increase cash generation and hopefully reduce costs in the process.

5. Additional facilities required

It may be that you require additional borrowing to finance your growth. If your existing facility is a stand-alone invoice finance facility you may wish to consider a stock finance or a trade finance facility. Perhaps a full asset based lending solution taking into account debtors, stock, property and plant & machinery may be the answer.

Beyond a stand-alone invoice finance facility are a variety of solutions to meet your cash flow requirements. Why not take a look at our Cash Flow Solutions guide to learn more.

Need help switching invoice finance provider? Call us on 0845 251 4040 / 07789 638 178 or fill in the form below and we will call you back: