I Already Use Factoring
If you already use the services of a factoring company you may be encountering certain problems which we may be able to help you with. We have listed some of the mostly commonly encountered problems:-
The Factoring company will not increase my funding limit
If your business is growing satisfactorily and you have run the facility correctly there is no real reason why the factoring company should not support your growth. However sometimes the factoring company may become cautious because a similar business in your sector has had problems or caused them problems. It maybe because there is an overall limit on a customer that you are not aware of, or internal issues such as their own funding - the Factoring company in some cases may have internal limits that they cannot exceed.
Communication is often the key and because of our experience in the industry we are always in a position to advise the best way forward.
Communication is often the key and because of our experience in the industry we are always in a position to advise the best way forward.
The Factoring company wants to renew the agreement on less favourable lending terms
It is very important to discuss terms of a future agreement well before the renewal date. All factoring agreements give details of notice period and some factoring companies will leave the renewal process as late as possible in order to give their client limited options. If the facility has run well and you have complied with all terms there is no reason why the agreement should be renewed on less favourable terms. However if the factoring company has had problems with the account they may wish to change the terms in order to give them more security and this sometimes means increased charges.
Find Me A Factor's team will look at what you are being offered and advise you whether you are being treated fairly
The Factoring company offered an advance of 85%, but in reality the overall advance is much lower
This is a common problem. Most people looking for a factoring facility are focussed on the percentage advance and do not look at the other key terms. You may have been offered 85% but the factor may have put in a clause setting low limits on your customers and included a concentration limit which again restricts funding. So whilst you have been offered an 85% advance you could in reality be drawing down less than 70% of your ledger.
Find me a Factor will look at what you are being offered and propose a solution.
Find me a Factor will look at what you are being offered and propose a solution.
The Factoring Company want to change my confidential Invoice Discounting Facility to a Factoring Facility
It rather depends on how difficult trading has been and what effect it has had on your facility. Many Factoring companies include clauses which allow them to change the terms if your circumstances change. If the Factoring company feel their security has been weakened they may well wish to impose changes.
FindmeaFactor can look at the situation and advise you whether the changes are fair and assist in reducing the impact of those changes.
FindmeaFactor can look at the situation and advise you whether the changes are fair and assist in reducing the impact of those changes.
My Factoring company has been taken over
Over the last few years a number of factoring companies have been sold and any change of ownership can have an effect on your business. Any new owner may have their own way of running things that may not suit you.
It is vital to meet representatives of the new owners in order to ensure that the terms of your agreement are not going to be adversely changed or amended. Give us a call to discuss your situation. Certainly do not sign anything until you have spoken to us.
It is vital to meet representatives of the new owners in order to ensure that the terms of your agreement are not going to be adversely changed or amended. Give us a call to discuss your situation. Certainly do not sign anything until you have spoken to us.
My Factoring Company has ceased to trade
You do not expect your funder to go bust, however it has happened twice in recent years and I am sure it could happen again. Such an event will have a serious effect on your business as it is likely that there will be no further money available to you.
Contact us immediately and we can advise the best way forward.
Contact us immediately and we can advise the best way forward.
The next step
These are just a sample of the problems that existing users of factoring and discounting arrangement may face. However remember, Factoring is one of the best ways to secure finance for businesses and all problems can be overcome with the right approach. Contact us if you have any other issues that are concerning you.
