Stamp printed on the approved loan application approved.
Phil Hall No Comments

Well the Banks are keeping to their side of the bargain if you believe what you read in the press. My experience in 2011 though couldn’t have been more different. I found the Banks generally keen to support the businesses I represent. The issue I found was not “if” but “how” and it is with this in mind that I want to put the case for Confidential Invoice Discounting.

The attitude of the Banks has definitely changed post credit crunch. The preference now, it seems to me, is for C.I.D financing over overdrafts, being for them a very capital effective method of lending. My problem is that I have yet to work for an MD that likes to admit using Invoice Discounting – probably because it is too closely associated with factoring – “the lender of last resort”

My experience is that Banks understand this and take the “confidential” part of the name seriously – even when they contact your customers as they can be required to do at the outset and during audits.

But first the “Cons”. My view is that it is not a suitable method of financing an acquisition for example and it can appear expensive – a low rate of interest but a service charge that needs to be paid even when you’re not utilising the facility.

But at a time when the value of other forms of security, like property, have fallen, being able to use your sales ledger to access funds quickly means that this method of financing will increase in popularity. And of course the amount you can access grows as your business grows. Best of all – no personal guarantees – though do watch out for indemnity clauses.
If you need to talk to someone about financing and invoice discounting in particular – contact me.