Potential Finance Ltd - Factoring Services For
Working Capital
There has never been a time when the importance of working capital has been of such importance to businesses large and small. The ability to meet suppliers' demands as and when they fall due is often seen as a key indicator of the financial stability of a business. Any business that is unable to pay suppliers in an orderly fashion is often seen as weak and will find additional suppliers difficult to source.
Working capital is a fine balance of managing funds from lenders and cash collections from your customers, in order that you can pay for goods and services that are being provided to you. For many years the traditional source has been the overdraft provided by High Street Banks. Due to changes in business practice Banks are now less interested in providing overdrafts and in many cases they often seek third party security in order to reduce their risk. Additionally Banks have to consider what are called gearing ratios. This is where lenders will lend up to three or four times the capital that exists in a business. For example if your capital was say £10,000 a Bank might only lend a maximum of £40,000 even though your business needed more in order to work efficiently.
The main asset within most businesses tends to be the sales ledger. A factoring facility is a straightforward way of putting this asset to work for your business in order to relieve cash flow worries and enable the business to grow and develop. Factoring is now the chosen form of finance for around 30,000 businesses in the UK .
The facility is extremely straightforward; we will advance up to 80% of your existing sales ledger and thereafter the same percentage for invoices you pass to us after they have been issued to your customers. The diagram below shows how our service works.
It is useful to compare what both parties offer
Bank
Will offer an overdraft linked to the capital in the business.
Overdrafts are on demand facilities which means the Bank has the right to recall the overdraft at any time in the future.
Banks will often seek third party guarantees to improve their security.
Overdraft facilities will carry certain conditions known as covenants, which will relate to the profitability of the business, and balance sheet ratios, for example, how large your creditors ledger is in relation to debtors.
The Factoring Facility
The facility is linked to your sales not your balance sheet, or even necessarily profitability.
Factoring agreements are for a fixed period and are not repayable on demand.
Factoring Facilities will grow with your business.
Factoring Companies see their security in your company not on external security.
Factoring offers credit management services to help you collect your money.
Once you have made the decision that factoring is right for your business you need to choose a factor you can work with and who understands the issues in your business. Below are the key areas that set us apart from other factoring companies.
We are truly independent.
By not associating ourselves with banks and other financial institutions, we can be truly free thinking and flexible and tailor our service to your individual requirements.
With Potential you are a name not a number. Your problems are our problems; you will build a relationship with a dedicated client manager who is always available to resolve issues as they arise. We often encounter relationships that have broken down with other factors because time wasn't taken to properly work through changing issues and situations. With Potential you can meet and speak directly to the people who run our company.
Active relationship development. We encourage our clients to visit our premises so we can develop our relationship with them. Our hands on understanding of your company will establish the needed empathy that we employ with your client-base when carrying out your credit control function.
Your staff can benefit from our expertise. We will let your staff sit alongside ours to train and familiarise them with our accounting and reporting procedures as well as charges structure and account handling techniques.
Industry leading collection rates. At Potential we believe that our initial attention to detail in the setting up of your tailored credit control procedures ensures we can effectively take-over and improve your collection procedures and rates. Potential boasts one of the best overall collection rates for our industry.
Introductions to businesses similar to your own. We can put you in touch with the principal in a similar business to yours from our current client base to validate the value and service that Potential provides. All of our clients have discovered why we are different and they tell the story better than we do.
Speedy delivery of client reports. We deliver all of our client reports by email enabling you to receive them at the close of business that day. In addition you can access your account via the internet and remember our system is live, so you can see changes as and when they happen
Payroll Services.
If you are in a sector that requires payroll service, we can arrange a service that will deal with all payroll management issues including the direct payment of taxes and NHI to the Inland Revenue.
Trade Finance.
We are in a position to arrange trade finance and purchase finance facilities for businesses who need support in this area.
Credit Insurance .
You may decide that you wish to protect your business against bad debts. Credit insurance can be arranged to cover all debts or specific risks.
If you are looking at improving your cashflow please call to discuss your requirements, or visit our website.
For speed, contact the following on their mobile phones
Hugh Craen: 07880 707616
Email: hugh.craen@potentialfinance.com
Ian Spring : 07900 917831
Email: ian.spring@potentialfinance.com
Bepaidontime.co.uk
The Old Granary, Lordswell Lane, Crowborough, East Sussex, TN6 1HX
Tel: 0870 224 2804 | Fax: 0870 224 2807