- 26 Jun
Worried About Punitive Measures And Reprisals When You Terminate?
Leaving an invoice finance company, who are providing your funding for your business, and in some cases other services such as credit control for your debtors, can be a daunting task. There tends to be a close relationship between the provider and the client, particularly in the case of factoring facilities where the provider is undertaking the credit control activity for their client.
Reprisals And Changing Invoice Finance Companies
We have previously put together a detailed guide on changing invoice finance companies, to help make the process as smooth as possible.
However, sometimes when customers are looking to move between different funders, they are - often unnecessarily - worried about potential reprisals from their current invoice finance company. They worry that as soon as they give notice to terminate, their funder with withdraw or reduce prepayments, or otherwise make life difficult for them. The reality is that whilst most providers will fight to retain clients, they will normally treat their client fairly during the termination process.
In some cases this type of fear of this can be enough to stop customers moving to benefit from improvements such as cost savings, improved service levels, alternative products or additional funding levels. These fears of punitive measures are normally completely unfounded.
Worried About Punitive Measures?
In some cases the clients are afraid that if they give notice to their existing invoice finance company, they will experience some kind of reprisal, or punitive measures from there current provider. This is very unlikely to be the case. There are strict guidelines laid down by UK Finance, the trade body for the invoice finance industry, and their members have to adhere by a code of conduct that would not allow this. Members of UK Finance are expected to "deal fairly" with their customers at all stages of the arrangement.
You can check with UK Finance to see if your provider is a member, or look at your providers site to see if they are members of any other bodies - they too could have codes prohibiting punitive measures and reprisals.
We have dealt with numerous customers moving providers and we have not come across any recent examples of providers taking revenge against clients that they are about to lose. Most providers have the foresight to understand that clients can sometimes return after having left for an alternative funder - reprisals will not be condusive to that possibility.