Fraser Osborne Commercial Finance Plymouth 38 years Advisors & Trainers
     Fraser Osborne Commercial Finance       Plymouth                                      38 years Advisors & Trainers 

Invoice Finance, Factoring, Invoice Discounting, Export Finance, Asset Finance, Trade Finance, Stock Finance and EFG Loans in brief

Invoice Finance (sometimes also known as sales finance, receivables finance and debt finance) has two main facilities, Factoring and Invoice Discounting. 

 

Factoring



  • You sell your products/services to other businesses on credit terms (most business types are eligible)
  • Your Factor will offer up to 90% finance against total unpaid invoices and future invoices
  • A Factor will chase your invoices using a  range of options and will provide full sales ledger management
  • There are 2 charges    Interest (between 2.50% and 4%)  and  Service Fee  based on turnover and workload

 

Invoice Finance, Factoring transforms cashflow, removes workload, assists growth and helps to secure better supplier terms

Factoring can also be used to finance export invoices and improve collection of debts from foreign customers

 

Invoice Discounting (Invoice Finance)

Often considered to be the preferred option and fast growing

  • Similar to Factoring BUT with Invoice Discounting you retain full customer contact and sales ledger management 
  • Can be fully Confidential depending on criteria
  • The service fee is lower than for Factoring as the main collection workload and processes remain with you

 

Trade Finance

 

Trade Finance is a TRANSACTION facility. Ideal for one off, seasonal, unusually high value sales. More expensive than Invoice Finance due to perceived risk

 

Basic criteria. You have:

  • A confirmed order from a creditworthy customer   
  • The supplier is reputable and the products are of good quality
  • The goods are delivered from supplier to end customer direct (or under well controlled management)
  • The goods are finished goods and do not require any further manufacture/changes
  • The gross (profit) margin on the goods are in excess of 30%

The Trade Financier will pay your supplier direct for the transaction products for you according to strict terms and conditions and oversee everything for you. Payments to overseas suppliers are often by Letters of Credit. Suppliers take greater confidence in the transaction.    

 

Asset Finance 

 

There are various types of Asset Finance. For SMEs looking to expand, keep pace with technological advances and improve efficiency. Capital and cashflow restricted businesses can gain the 'economic use' of new assets by getting an Asset Financier to purchase the required assets and then lease them to you.  

  

  • Asset finance is effectively a loan that is used to obtain equipment that might otherwise be unattainable.
  • Whenever organisations invest in tangible assets - anything from office quipment to manufacturing plants and from cars to a fleet of aircraft - they usually need an affordable, secure means of finance.
  • Asset finance provides the means and expert specialisations in many asset types.

 

Stock Finance   



A stock finance facility boosts cashflow by releasing the working capital that would otherwise be an asset wasted on your balance sheet. A lender purchases stock from you at a discounted value following a third party, specialist stock valuation to establish its true realisable value. You then provide the funder with monthly (or other agreed regularity) stock listings before agreeing on funding levels.

 

All of the above can be considered individually or in a combination to resolve funding issues in a structured finance form  

 

Loans (Govt, Crowd Funding, Funding Circle etc)