• Business Rescue Finance

    Factoring as business rescue finance to help avoid insolvency.Growth is closely linked to the use of factoring, however this type of funding can also serve as business rescue finance if you find yourself in a difficult financial position.

    It may be that fast access to a cash injection is enough to save your company, and put you back on the right track.

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    Business Rescue Finance

    This is due to the fact that qualification for this type of funding is not primarily based on your financial position, or the value of assets that you can offer as security. It is based on the value of your outstanding sales ledger of unpaid receivables. Therefore, even a company that has CCJs, is under creditor pressure (suppliers pressing your for payment), or that is subject to a CVA (Creditors Voluntary Arrangement) may be able to access factoring to unlock the value tied up in that sales ledger.

    If you are facing potential insolvency, you may be able to change the shape of your cash flow by using this type of funding.

    Company Insolvencies Have Increased

    The Government's Insolvency Service has just reported a 2.6% increase in company insolvencies for Q2 2019 to 4,321, up from Q1 2019. The main sectors contributing to this increase were: accommodation & food service industries; construction and other services activities. The construction sector contributed the highest number of new company insolvencies.

    Some of those businesses may have been saved if they had access to factoring as business rescue finance. I would be interested to review those case and understand how many of them we might have been able to help.

    Business Difficulties

    When you get into business difficulties, maybe before you reach an insolvent position, it can be caused by a variety of factors. This could include factors such as:

    • Losing one or more large customers.
    • Not getting paid by one or more debtors i.e. suffering a bad debt.
    • Increases in overheads.
    • Running short of cash.
    • Losing credit facilities, or having bank funding withdrawn e.g. an overdraft or credit cards.

    The funding from a factoring facility could improve your financial position, and even rescue your company. We also have other options, such as bad debt protection, that can protect you against a customer becoming insolvent and not paying you.

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