We had a call today from an individual looking to set up a recruitment business for chefs. His personal bank would not help, mainly as he is not a home owner. We have put together a sensible business plan and brought in a couple of possible factors to compete for the business, so far one has already come back with an in principle offer. There are a lot of providers competing for business so even if the bank says no, there may still be help out there. Finding money is not that easy which is why a specialist, independent, broker can add value.
Archives for January 2011
Most Factoring companies will ask for your Guarantee to back up the agreement, but there are marked differences in the type of guarantee so it really is worth checking the small print. Guarantees are also described as warranties or indemnities and in some, albeit rare, cases the factoring company will ask for a supported guarantee which involves them taking a charge over your home. To fully understand the possible implications of giving a guarantee legal advice is recommended. Given the fact there are levels of guarantee it may be worth shopping around.
We talk to a lot of businesses trying to change their factoring company. It ought to be a straightforward process but there are obstacles to look out for and to bear in mind. It does happen frequently and there could be big savings to be had in moving.
- Do check the terms and conditions that govern your existing arrangement. One issue is cost and it’s really important to check termination periods. Your agreement will be for a certain period and trying to exit early can result in penalties being charged.
- If there is a specific reason for leaving make sure that reason is known to the incoming factoring company. For example if you are not getting as much money as you had been led to believe from your current lender be certain the new factoring company will provide the extra funds.
- The independent factoring broker has a critical role to play here. A business fundamentally happy with its existing provider probably has little to gain from switching and the brokers position should reflect this. If the reason for change is valid then a good, independent broker can and will help.