- 11 Apr
Shorter Invoice Finance Termination Periods Becoming More Common
Termination periods, the period of notice that an invoice finance client needs to give to their funder in order to terminate their factoring or invoice discounting agreement, vary widely between different invoice finance companies. Sometimes a client will be acceptant of a longer termination period in order to secure a good deal but in other cases the client wants the flexibilty of knowing that they don't have to serve a long notice of termination period in order to leave their invoice finance company or change providers.
When I first worked within the industry the standard notice of termination periods were generally longer, often 3 to 6 months without shorter options but over recent years offers of much shorter notice periods have emerged. Several providers now offer termination periods around a month and more recently we have seen 7 days notice of termination being offered for a wholeturnover agreement.
Spot factoring and the various invoice invoice auction sites also have an appeal to some clients offering them a transactional basis to the arrangement where termination is not normally an issue - the client chooses which invoices to discount or factor so can choose to stop at any point.
So there are a lot more options now for clients giving them more choice which can only be a good thing. We also hear rumours around the industry of other funders considering shortening their termination periods which is again good news for factoring & invoice discounting clients, providing the option of a longer termination period in return for more favourable rates is still available if that is the client's preference.