- 30 Mar
How To Avoid Long Factoring & Invoice Discounting Notice Of Termination Periods
One of the things that sometimes deters businesses from using invoice finance is the fear of long periods of notice of termination required in order to terminate the factoring or invoice discounting facility. These are not universal across the industry though, in fact there are dramatic difference between invoice finance companies.
There are several options for businesses that want to know how to avoid long notice of termination periods for factoring and invoice discounting:
- Spot factoring or invoice discounting - spot factoring companies normally don't have a termination period as such, their client chooses which invoices they want to receive funding against and the client can choose to stop discounting at any point.
- Notice of termination periods differ between invoice finance companies - we recently had a meeting with a new funding partner that are offering just 7 days notice of termination for traditional factoring and invoice discounting facilities. This would give you the cost saving of using a normal "whole turnover" style invoice finance arrangement with the flexibility of a very short notice period for termination at any point, should you need it.
- Invoice finance auction sites - once again these tend to work on a transactional basis - you decide which invoices you want to discount and there is no obligation for you to continue to use the service.
The terms and conditions do vary between providers but our independent advisers can help you understand the differences if required.