- 19 Feb
The Pros And Cons Of Selective Invoice Finance
Selective invoice finance (SIF) has a number of pros and cons when compared with a whole turnover (WT) facility.
It should be noted that there are many similarities between both SIF and WT, for example, both types of facility deliver cash flow improvements, both have credit control, bad debt protection and confidentialty options.
This is an explanation of the key differences.
Pros And Cons Of Selective Invoice Finance
- Choosing Invoices To Fund - the obvious difference is that you don't have to factor, or discount, all your invoices with a selective facility. You can pick and choose invoice that you wanted to have funded. With whole turnover, as the name suggests, you submit all your invoices (although there can be some exceptions by debtor or type of invoice).
- No Minimum Fees - it is normally the case that you will not have any minimum fees with SIF. This means that if you don't choose to submit any invoices, you don't get charged anything. This can be a great advantage if you operate a company with seasonal trading peaks and troughs.
- Set Up Charges - you can have a set up charge in both cases, but often they can be negotiated away with WT. The fact that you may never use the SIF at all means that a set up fee is likely to be present, although it is often just a few hundred pounds.
- Controlling Charges - when you decide which invoices you want to submit with SIF, you are very much in charge of the costs. However, there are fixed fee deals available on WT which can make the charges even more predictable than for SIF (where you are normally charged additional amounts the longer debts remain outstanding).
- Maximising Funding - if you want to unlock the maximum amount of funding, then you need to consider a whole turnover facility to fund against all your invoices.
- Losing Out On the Bulk Discount - by funding all your invoices with WT, you effectively get a discount on the charges. We have seen examples where it is cheaper to fund all your invoices for an entire year than to select a few invoices to fund for a few months.
- Workload - there are slick upload systems available for both types of product, although you could argue that there is more workload in selecting invoices to upload, especially when compared with WT sales ledger upload facilities that take your entire debtor book and transmit it in the background.
- 18 Nov
Selective Invoice Funding Is Still Available
Previously I reported that the selective invoice finance (SIF) industry has mostly moved away from the invoice auction model, towards a model whereby pricing is determined according to a pricing policy for each funder.There still remain a number of SIF providers that offer flexible funding against individual invoices, or batches of invoices. Some sectors, such as car crash repairers, have their...
- 11 Jun
Selective Debtor Finance.
Selective debtor invoice finance (SDIF - also called single debtor finance SDF) is subtly different from selective invoice finance (SIF), and other types of receivables financing.With SDIF, you choose which debtors you want to receive funding against. You then submit all of your invoices, billed only to those chosen debtors, to the finance company for funding. You do not receive funding against...
- 03 Apr
Single Invoice Finance For A Fashion Designer
Glamorous is not how you might typically describe the world of invoice finance, but sometimes we can become involved with funding far more glamorous sectors, such as the case below, in the fashion design sector.This was a case where we were able to assist a small fashion designer that was looking for funding against a single invoice initially. I have written recently about how late payments are...
- 25 Feb
The Price Of Single Invoice Finance
Comparing prices for single invoice finance is not quite as straightforward as you might expect. I have just been looking at an example of some costings sourced for a prospective customer and there are numerous different pricing systems being used by the different invoice finance companies that we have spoken to.It is always worth comparing selective quotes against other forms of invoice...
- 14 Feb
Using Early Payment Discounts To Improve Cash Flow
Recently, we received an enquiry from a prospective customer seeking selective invoice finance. They were having a temporary cash flow problem, but they had two invoices totalling £5K that they said they wanted to discount in order to access the cash tied up in those invoices, immediately.Selective invoice finance would seem to be the perfect solution, as there would be no obligation for them to...
- 20 Dec
Spot Invoice Finance
I had a conversation the other day, with a colleague who follows my blog posts on LinkedIn, and he said "you must get loads of business from LinkedIn?", not a lot I replied - in fact I can't remember the last time someone contacted me directly via LinkedIn. Then, coincidentally, a couple of days later, I receive a request for spot invoice finance via LinkedIn!The term "spot" is more commonly...
- 27 Mar
Short Term Invoice Finance
Many companies are not aware that you can use invoice finance on a short-term basis. There are facilities available that are of an ongoing nature, for long term use, but there are also short-term invoice finance facilities that allow you to use the service for as little time as you feel you need to.Invoice finance works by releasing a proportion of the value, of your credit sales invoices,...
- 11 Mar
Selective Debtor Finance From Scottish Pacific
UPDATE SINCE PUBLICATION: SCOTTISH PACIFIC BUSINESS FINANCE TO EXIT UK MARKETI have just had an email from Scottish Pacific Business Finance which was headed “Invoice finance with a difference“. The addition to their product offering is a selective debtor finance option.The way that the product works is that you are able to select debtors against which to receive funding and bad debt...
- 14 Sep
Selective Invoice Finance For New Starts - No Minimums
Selective invoice finance for new starts can be the most flexible option when you first launch you new start businesses. When you launch your new start you are always going to be uncertain that it will take off and that you will achieve the level of turnover that you hope for, but you may still want the benefit of funding against your invoices before they are paid, to improve your cash flow....
- 03 Aug
Selective Invoice Finance Price
This is an example of a selective invoice finance price that we found for a customer recently.With this particular client, they already had a recourse factoring facility, but they wanted to take over handling the collections (credit control) themselves. Some companies prefer to handle the credit control themselves, others choose to outsource the function.They also only had a very small borrowing...
- 12 Jun
Selective Invoice Finance Fast
This is an example of just how we can get selective invoice finance fast for a client - we can ensure a fast turnaround for you if you need help quickly.In this particular case we were contacted by a car repair body shop that was looking for a selective invoice finance facility. They contacted us on a Sunday, we introduced one of our funding partners, that specialises in car body repair shops, on...