- 29 Mar
Is Invoice Finance Expensive?
Is invoice finance expensive?
The answer to the question is that it doesn’t have to be. However, if you choose the wrong provider, you could end up paying more than you need to.
Range Of Prices Research
Our research has shown that overall pricing for, as an example, a factoring facility can vary by 165% from the cheapest quote to the most expensive. We also saw an 86% differential between the top and bottom of the confidential invoice discounting pricing range.
However, there are many different types of facilities and the fees can be structured in a number of different ways.
Selective Invoice Finance
With a selective invoice finance facility you pick and choose the invoices that you wish to have funded. Normally, there are no minimums requiring them to finance a particular volume of turnover. The fees are often structured such that you are paying approximately 2% of the funds in use, each month.
We have examples of live clients that are paying very little for their selective factoring facilities. One of our clients paid their funder approximately £1 last month, in fees for the invoices that they chose to discount. This demonstrates how controllable the charges can be and how you do not need to be subject to minimum fees.
All Inclusive Fees
There are also very cheap, all-inclusive, deals available. For example, small factoring arrangements can be put in place on a whole turnover basis, such that you are receiving funding against all your invoices, for as little as £250 plus VAT, per month - remember that's to fund all your invoices for an entire month.
This is a very cheap way of funding your business and it also gives rise to a very predictable fee structure, so you know exactly what you’re going to be paying each month.
Cheap Deals For Larger Companies
As with so many services, there are discounts to be had for larger companies that are transacting a larger volume of turnover. Many of the funders are keen to attract this kind of business, and so will offer a discount on the fees in return for larger volume clients.
Please call Sean on 03330 113622 to discuss your circumstances, and find out how cheaply we could find a funding facility for your company.
- 05 Nov
Invoice Discounting Service Charge Average Percentage
Invoice discounting service charge is often the term people use when referring to the "administration charge" made for invoice discounting services. It is the percentage of your turnover that you pay the funder to use the service.GET A QUOTE WITHOUT OBLIGATION (and no impact on your credit score).Read about how the costs are made up and what typical costs will be.To compare the fees between...
- 03 Oct
How Invoice Finance Broker Commissions Work
I have been on the subject of pricing misunderstandings for the last few days and another incident worth sharing occurred with a car body repairer that we were speaking to.SEE HOW MUCH WE CAN SAVE YOUCar body shops that invoice insurers for crash repairs are highly suited to factoring, the nature of the papertrail for each transaction means that the funders, though specialist, can offer very high...
- 02 Oct
Is Bad Debt Protection Included In Your Invoice Finance Quote
Leading on from my previous post about explaining how to compare invoice finance quotes, and how customers often focus on minor components of the overall cost - rather than those that really make the major difference, I saw an example of confusion over whether or not bad debt protection is included in an invoice finance quote.The answer is that it depends on the provider.Some invoice finance...
- 04 Jun
4 Simple Ways To Reduce Your Factoring Costs
If you are an existing factoring user, and you are looking for ways to reduce the cost of factoring, we have set out below four simple actions that you could consider.The cost of factoring is constantly changing, rates have moved over the last 12 months. In addition to this, the rates offered by different factoring companies will vary dramatically. In a recent study, we found that there was...
- 23 May
How We Found A Cheap Factoring Quote Less Than 2K A Year
We have just found a really cheap factoring quote for a prospect, that is worthy of sharing, at less than £2K per annum - all inclusive.The small micro business has a low level of annual turnover, hence they are very price conscious. They want to factor all their invoices, so it is a whole turnover facility.Factoring will provide them with both funding against their sales ledger, and a credit...
- 18 May
Summary Of Our Invoice Finance Pricing Research
This post pulls together all our research, and information, regarding invoice finance pricing and prices.Our free receivables financing guide describes both how the products work, and also how the pricing is structured. It also sets out minimum costs for full turnover products, which start from c. £3,000 + VAT per annum - selective products (typically costing c. 2% per month) can have a much...
- 03 Apr
The Cheapest Invoice Finance Company
If you are looking for the cheapest invoice finance company, you may be surprised to know that there is no single company that answers this description.The cost of an invoice finance facility depends upon a number of factors, and the cheapest provider for any particular circumstances varies according to those circumstances.We have undertaken extensive research into the pricing of invoice finance...
- 18 Mar
Service Charge 67% Of Overall Recourse Factoring Fees
After recently reviewing the result of our confidential invoice discounting (CID) pricing research, I looked back at our recourse factoring pricing study, which completed about a year previously.The results were similar in that they showed a wide range of pricing differentials between the top and bottom ends of the market, in fact the range was a staggering 165% between the cheapest and most...
- 14 Mar
Why You Should Not Just Compare Invoice Discounting Pricing Percentages
So often we speak to customers that are comparing various offers for invoice discounting, and their key measure for comparison is the headline administration (often wrongly referred to as service charge) charge percentage.With an offer for invoice finance, you normally are quoted a service fee (or administration fee for invoice discounting), a discount charge (similar to interest) and then there...
- 02 Feb
41% Cost Saving On Invoice Finance
You may be forgiven for thinking that any existing users of invoice finance will have moved providers, and will be benefiting from the lowest prices that are on the market, but that is clearly not the case. This was highlighted in the case of a prospect that we assisted over the last few weeks.They spoke to us regarding an existing invoice financing facility, that was being provided by a bank...
- 29 Jan
Service Charge & Discount Charge Differences Between Invoice Discounting Companies
I recently reported the 86% differential between the cheapest and most expensive quotes that we received for a particular client situation. This difference was based on a comparison of the anticipated charges that might be levied by different invoice discounting companies.I thought it might be interesting to look in a bit more depth at the components of those costings, and how they vary between...
- 24 Jan
Invoice Discounting Minimum Monthly Fees Charges Compared
I was asked to clarify if minimum annual fees are still charged monthly, and how many providers offer a flat fee structure (as opposed to charging a percentage of turnover). The answer is that most providers have moved away from quoting a minimum annual fee, towards quoting minimum monthly fees. The effect is the same, but I guess the number presented to a prospective client seems much smaller...
- 23 Jan
41% Cost Saving On Recourse Factoring
One of the things that we pride ourselves on is keeping up to date with pricing around the factoring market, so that we can find the best rates for our clients.In a recent example we were able to find a c. 41% projected cost saving for a prospect, on the fees that they were already paying - this equates to a substantial annual cost saving for the company.This particular example involved a company...