For those businesses looking to raise capital through invoice finance, here is a quick overview of what Invoicing Finance companies will review when considering to lend:
• Existing security arrangements (e.g. does another lender have an existing charge over the debtor book?)
• Quality of the debtor book (e.g. does the debtor book include any blue chip or reputable clients? Have many clients have gone bust?)
• Recoverability and historical bad debt profile (e.g. are bad debts a recurring issue?)
• How fast the debt collected (i.e. what are the average debtor days)?
• Terms of business (e.g. what are the standard payment terms issued to clients?)
• Overseas sales (some lenders may exclude certain countries entirely)
• Infrastructure and staff (e.g. what systems, procedures and controls are in place to collect the debt?).
If you would like to discuss invoice finance or any other debt or equity options with an Accountant and Trusted Business Adviser get in touch with us. We are accountants in Reading and offer a range of finance and accounting outsourcing as well as virtual CFO services for growth businesses. For a free no obligation consultation email info@teamsas.co.uk or call 0118 911 3777.
If you need advice and would like to discuss any of the points in this article please get in touch.
