Bibby Financial Services’ Q2 2016 SME Confidence Tracker survey shows a 3% drop (from Q1) in SME confidence that sales will grow in the next three months, down to 45%. Considering that Q1 2016 showed an increase in confidence, compared with Q4 2015, it is probably quite a positive result in light of the run up to the Brexit vote that took place at the end of Q2. Perhaps there will be light at the end of the Brexit tunnel! It certainly seems that the harbingers of doom have calmed down and most economists are no longer predicting that the UK economy will even enter recession.
We are currently working on trade finance quotes for customers and we will shortly be adding some more details of recent costings to our website. On the FundInvoice site we have always tried to bring customers actual examples of prices, and trade finance is the one area where we want to add some more actual examples so clients have an idea of the costs, even before we get them a quote.
It is a difficult product to price, as the fees are often dependent upon the exact nature of the service that the client wants. Many facilities work successfully in conjunction with factoring, such that they factor collects in the monies owed by debtors in order to repay the funding used to facilitate the importation of goods. This can enable companies with poor financials to secure funding as it is the strength of their customers that is important, not the strength of their own business.
This is the type of financial arrangement that can help you to start a business with very little of your own capital. All you need is a source of supply for the goods, and confirmed orders from good quality debtors and a the financier will do the rest. They can handle both the advance payment for goods e.g. via Letter of Credit or open credit, and they can also help you with the credit control function required to get paid for the goods once they are delivered to the end customers. This credit control support can remove the need for you to employ a credit controller or to use your own time to chase invoices for payment.
In the past I have worked with an importer of frozen food that received shipments from abroad, placing back-to-back orders with their supplier against confirmed orders from their customers.. The containers where shipped direct to well known end customers, against the confirmed orders. The importer used a finance house to fund the imports and handled the whole business from home, without ever seeing the goods. A great business model where all you need to know is a supplier and one or more customers.
The August 2016 edition of FundingVoice magazine is online. It includes details of how one form of finance is enabling business sales growth and a set of specialist support resources for recruitment companies that are seeking funding:
You can subscribe, for free, to future editions here: Subscribe To FundingVoice Free Magazine
We have had an issue recently with a factor turning down a small recruitment company, that we had introduced, due to the prime movers not being home owners and having some previous defaults on their credit history – not CCJs, defaults. It is hard to believe that any factoring company would turn down the chance to fund a small recruitment deal, considered the “bread and butter” within the factoring industry.
This approach of insisting on home ownership, and no adverse credit history is so far away from what how I was taught to look at deals when I was working for a major invoice finance company. The prime security was always the debt, and solid debt would excuse many issues around the personal credit position of the prime movers – recruitment sales, with signed timesheets, is about as solid as debt can be.
Fortunately there are factoring companies that do not take such a risk adverse approach to these types of situation, and they will be sympathetic in such cases – it is just sad to see the issue of home ownership becoming such a stumbling block for some providers within our sector.
There seems to be a constant increase in the number of suppliers of selective invoice finance. Again over the last week or so we have been contacted by two more new providers. Good news, more choice for customers and there is definitely a place for selective facilities. However, the majority of the business that we see is looking for a whole turnover style arrangement, rather than just factoring the odd invoice.
It was also interesting the see an article in Business Insider giving their opinion about losses that they suspect have been accrued by two of the large peer-to-peer lenders (not in the IF sector). Judging by the amount of advertising that these P2P companies undertake, it is hardly surprising that they struggle to generate profits, despite transacting large volumes of business.
The online adverts of one of the new selective IF companies are now following me around the internet after having searched for their site in Google – more impressive but no doubt expensive advertising!
Many people think that invoice finance companies are not able to fund the retail sector, shops etc. However, some of them are. There are specialist retailer finance products that provide finance against your credit/debit card machine takings, based on your history of trade. This can release a cash injection into your business to use for any purpose.
For more details: Shop finance
Very much looking forward to the 1066 Business Awards tonight. Not only is the magazine sponsoring the category of “Best Employer of the Year” but FundInvoice are also finalists for “Best Small Business of the Year”. This is the second year running that we have been finalists, which is an achievement in itself for us.
It should be an interesting evening!
We now have a help area for recruiters on the site.
It has help regarding funding options that are available, credit control support and payroll outsourcing. We have included a number of case studies explaining how we have helped staff agencies in the past, and we will be adding the findings from our survey of local recruiters to that page as we release them.
FundingVoice magazine are proud to be sponsoring one of the 1066 Business Awards this year. We will be sponsoring the award for “Employer of the Year 2016″, which recognises local businesses as outstanding employers.
FundInvoice were lucky enough to be nominated as Finalists, in another category, last year and after attending the awards dinner we were really impressed with how this event recognised achievements within our local community.
The next edition of FundingVoice magazine is out tomorrow.