Why are more established businesses choosing to use invoice financing?

Since the global financial crisis began to bite in 2007, there has been a marked rise in SMEs seeking alternative funding sources. As traditional banks have become increasingly reluctant to lend, the gap remaining is increasingly being filled by so-called challenger banks. Unaffected by the legacy debts and bad PR of traditional banks, they have been able to offer SMEs new ways to inject capital into their businesses. With even traditional banks now talking of launching invoice finance divisions, coupled with the fact that ‘invoice finance’ was the most popular business finance search term on Google in 2013*, it is clear that this is becoming an increasingly popular and reputable finance model.

The growth in popularity of invoice financing isn’t just confined to start-ups and small businesses facing challenging times. Increasingly, long-established businesses are also using this method. In fact, established companies have just as much, if not more, to gain from invoice financing. As invoice financiers link their lending to a company’s sales ledger, businesses with a steady flow of sales and invoices have much to gain, especially if they have clients who are slow to meet their payments. Instead of using invoice financing to save a business from troubled times, the facility can instead be used to bolster a period of growth – which in turn may attract more investment in the business. After an initial cash injection, a steady flow of increased capital can facilitate buying services in bulk, thereby cutting costs in the long term. Outsourcing your sales ledger to an asset management company can also free up crucial team members and cut manpower costs.

The various models of invoice financing that are available can be extremely beneficial for established businesses. Companies that have strong links with their clients can keep control of their sales ledger by choosing invoice discounting instead of factoring. Businesses that regularly take on new customers can make use of the mutually beneficial credit checks that many invoice financiers will carry out on new clients.

With big banks failing to meet the needs of their customers, it is little wonder that SMEs and many larger companies are increasingly turning to a quicker and more convenient way to access capital. For many established businesses, the quick initial cash injection, along with the confidentiality and security that invoice financing provide, make invoice finance, discounting & factoring the only viable option – if they want to grow and prosper in this tough economic climate.

Why are more established businesses choosing to use invoice financing?

Crowd Funding is an alternative to traditional banking and finance companies

Crowd Funding has been in the UK for a number of years.

“Credit Crunch” and “Banking Crisis”. It started as banks across the globe lent too much money, too quickly and in many cases the loans then defaulted or had insufficient security attached to them. So, rather like a pack of cards the whole banking infrastructure started to collapse like a domino effect. Banks had insufficient capital to meet liabilities and governments had to step in to support banks.

The UK PLC has turned the corner. Interest rates remain at historic low, (Great for Borrowers & Devastating for savers and companies with cash held on deposit) business confidence is increasing of companies looking to invest in new equipment and infrastructure.

Crowd Funding how does it work? Typically an on-line lending platform (an intermediary such as Funding Circle or Funding Knight and various others) will bring borrowers together with investors. This is done by the borrower (an SME/owner) approaching the investors for a loan via an internet platform. An application for a loan is submitted via the P2P platform, (in much the same way as you would approach your bank manager for a loan). The borrower will have to outline their business’s background; the company must explain what the business does? Why it is profitable? How much it needs to borrow? The crowd funder will prequalify the application at the outset for validation.

How long the company requires the loan? financial information has to be provided, to include the last year accounts. A simple application form at the outset.

The borrower’s loan request will then be looked at and assessed by the Crowd Funder “in house” funding team and if the Crowd Funder can see a viable business and a clear “ability to repay” the loan, it is then advertised on the P2P website for investors to “bid” on. Investors are typically private individuals looking to earn a better return than they are currently receiving for funds held in a bank deposit/savings account. Once the loan request goes “live”, investors can bid amounts of typically £10 and upwards. They can also indicate what percentage return they want for their investment (subject to minimum bid rates suggested on the web portal and set by a “risk weighting” assigned to the borrowers business by the intermediary). The better the businesses financials are, the lower the minimum bid rate and therefore the lower the overall interest rate/borrowing costs. They (investors) can also ask the prospective borrower questions about their business or its financials, the borrower then having a choice whether to reply or not (it is advisable to do so!).

Once the loan is 100% funded, the borrower can elect to close the bidding and start the process of drawing down their loan. Alternatively, they can keep the bidding open in the hope that new investors lower their bid rates, remove the higher rate bidders and thus reduce the overall loan cost/interest rate.

The Crowd Funder platform provider will then take their “fee” from the loan amount with the borrower then signing the loan documents before the balance of the loan is deposited into their business account. The Crowd Funder offers Secured and Unsecured Funding.

Worthy of note is that each individual investors name is listed on the loan document that the borrower signs, in my experience, this can be in excess of 200+ investors for any one loan!

Crowd Funding – Fast Business Loans can be used for any purpose.

Great Alternative to Traditional Banking and Finance Companies.

Onwards and Upwards!

Crowd Funding is an alternative to traditional banking and finance companies

Crowd Funding has been in the UK for a number of years.

“Credit Crunch” and “Banking Crisis”. It started as banks across the globe lent too much money, too quickly and in many cases the loans then defaulted or had insufficient security attached to them. So, rather like a pack of cards the whole banking infrastructure started to collapse like a domino effect. Banks had insufficient capital to meet liabilities and governments had to step in to support banks.

The UK PLC has turned the corner. Interest rates remain at historic low, (Great for Borrowers & Devastating for savers and companies with cash held on deposit) business confidence is increasing of companies looking to invest in new equipment and infrastructure.

Crowd Funding how does it work? Typically an on-line lending platform (an intermediary such as Funding Circle or Funding Knight and various others) will bring borrowers together with investors. This is done by the borrower (an SME/owner) approaching the investors for a loan via an internet platform. An application for a loan is submitted via the P2P platform, (in much the same way as you would approach your bank manager for a loan). The borrower will have to outline their business’s background; the company must explain what the business does? Why it is profitable? How much it needs to borrow? The crowd funder will prequalify the application at the outset for validation.

How long the company requires the loan? financial information has to be provided, to include the last year accounts. A simple application form at the outset.

The borrower’s loan request will then be looked at and assessed by the Crowd Funder “in house” funding team and if the Crowd Funder can see a viable business and a clear “ability to repay” the loan, it is then advertised on the P2P website for investors to “bid” on. Investors are typically private individuals looking to earn a better return than they are currently receiving for funds held in a bank deposit/savings account. Once the loan request goes “live”, investors can bid amounts of typically £10 and upwards. They can also indicate what percentage return they want for their investment (subject to minimum bid rates suggested on the web portal and set by a “risk weighting” assigned to the borrowers business by the intermediary). The better the businesses financials are, the lower the minimum bid rate and therefore the lower the overall interest rate/borrowing costs. They (investors) can also ask the prospective borrower questions about their business or its financials, the borrower then having a choice whether to reply or not (it is advisable to do so!).

Once the loan is 100% funded, the borrower can elect to close the bidding and start the process of drawing down their loan. Alternatively, they can keep the bidding open in the hope that new investors lower their bid rates, remove the higher rate bidders and thus reduce the overall loan cost/interest rate.

The Crowd Funder platform provider will then take their “fee” from the loan amount with the borrower then signing the loan documents before the balance of the loan is deposited into their business account. The Crowd Funder offers Secured and Unsecured Funding.

Worthy of note is that each individual investors name is listed on the loan document that the borrower signs, in my experience, this can be in excess of 200+ investors for any one loan!

Crowd Funding – Fast Business Loans can be used for any purpose.

Great Alternative to Traditional Banking and Finance Companies.

Onwards and Upwards!

Crowd Funding is an alternative to traditional banking and finance companies

Introduction– Trade Finance for your Customer Orders

Global Asset Finance Limited provides trade finance to clients involved in exporting or importing finished goods through:

Providing appropriate finance to fund the transaction;

• Minimizing risks, particularly credit and political risks; and


• Managing the supply chain cash flow.

GLOBAL ASSET FINANCE LIMITED comprises knowledgeable and technically proficient professionals and corporate risk managers who understand the commercial pressures and demands of cross-border risk management, finance and logistics.

GLOBAL ASSET FINANCE LIMITED originates structures and finances business where there is an underlying trade. We use a range of financial and risk mitigation solutions to help meet your exact requirements including:

• Order Finance


• Procurement Finance


• Receivables discounting , as part of an overallsolution


• Letters of Credit confirmations


• Forfeiting


• Pre-Exportfinance


• CommodityFinance


• Import finance facilities


• Guarantees and Stand by Letters of Credit


• Capital Goods Finance and Leasing


• Credit Insurance

We have fundeda diverserange offinished goods, including:

BBQ’s; Children’s clothing; Commercial Batteries; Replacement Windscreens; Hi Tech cameras; Machine parts to Africa; Gift ware to major retailers; Used Vegetable Oil; Pizza boxes; Garden games and capital goods. Just to name a few.

CORE CRITERIA FOR TRADE FINANCE 

GLOBAL ASSET FINANCE LIMITED and its partners are aprovider of traditional transactional trade finance. GLOBAL ASSET FINANCE LIMITED will purchase finished goods onbehalf of their clients, against confirmed purchase orders from credit worthy end customers.

Client:-

•        Ideally established business with 2 years track record;


•        domiciled in most countries;


• -     Must be a Limited Company.

      Product:-

•        Ideally finished goods,


•        We don’t take manufacturing risk;


•       Trading Margin (Gross Margin) of at least 15%;


•       At least 8 months shelf life (not perishable goods);


•      No onerous on-going support obligation by the client.

 Transactions:-

•          Maximum ten or of 90 days pre-shipment finance, 120 days post shipment finance;


•          Minimum purchase quantity of £80,000 from anyone supplier over a 2 week period;


•         Confirmed orders from end buyers (no sale or return or call off orders);


•         End buyers must be credit insurable by our partners insurer, or offering Letter of Credit or Bank Guarantee from Investment Grade bank. Can be domiciled in most countries;


• One off transactions only considered if quantumis in excessof £250k GBP or equivalent;


• Maximum transaction size of £1m to any one end buyer, or £3m to multiple end buyers.


• Larger trades considered on an Credit & Risk Basis up to £100m;


• All trades conducted on a disclosed basis to buyer and suppliers.

 Costs and security:-

•  Cost varies on size and tenor of trade. Typical range is 2% to 3.5% per 30 days for cash use and 1% per month pre-shipment Letters of Credit and not in product;


• Security may include Debenture, Personal Guarantees or Warranties/Indemnities, or specific debt waivers from existing lenders relating to


• transactions being financed. Cross guarantees maybe required for group structures or SPVs.

 

 

Introduction– Trade Finance for your Customer Orders

Point of Sale Finance

Sales Increase – a lender normally expect to see a 10% increase in sales in the first year of operation for any retailer entering into Point of Sale Finance for its consumer’s. This subsequently increases but by how much is subjective as generally also linked to an on line strategy. A recent example of a retailer saw an increase in first year ales of 8.3% following the implementation of Point of Sale Finance which is consistent with expectations. A nationwide retailer is on target for a £10m impact from its first year of operation.

Visit: www.globalassetfinance.com

 

 

Point of Sale Finance

Bridging Loan's Yes or No

Bridging Loan Work how does it work?

Bridging Loans are used in order to supply finance for purchasing a new property, while the borrower is waiting for their current property to sell or just raise short term finance. However, it is becoming a very popular choice for individuals with limited resources. They can be employed for any purpose, as long as the lender accepts the offered security and exit strategy and is satisfied the borrower can service the loan. All bridging loan lenders will need to have a exit strategy for repayment before any funding will be approved. The term for repayment can be used to satisfy individual needs, the majority of bridging loans have a term less than a year.

Bridging Loans who wants one?

Anyone that is knowledgeable about the loan facility and how it works and upside and downside, understands the modus operandi, and has a plan for repayment can borrow money through a bridging loan. Bridging loan companies have been used by prospective residential or commercial property purchasers and developers. The funds could also be used for individuals that are seeking to buy a property, and develop it, and then put it back on the market for sale. Individuals in financial difficulty can use the loan to avoid repossession of their home. Bridging is ideal for all people that need some money and space to arrange an longer term facility or sell the property. Since the loans can range in value from £50,000 to £100m, there are lots of options. The cost of a bridging loan is expensive and a lot of people shy away once aware of the term and finance rates.

Benefits of a Bridging Loan or Punishment for Non Settlement of the Loan

Bridging loans can be beneficial for providing a flexible form of finance for short a period, which allows fast finance and a temporary injection of cash. Some bridges become available within as little as 48 short hours after acceptance and all the legal’s are in place. The loans have increased in popularity, so individuals can get finance through this financial product. Although, the company will review the borrower’s financial situation to ensure they can meet payments and have an exit strategy and even ask for additional security to be given. If the exit and full repayment is not properly executed, the individual will face some heavy penalties that feel like a financial punishment.

There are many alternatives to bridging loans that borrowers should consider, such as secured loans, conventional mortgages and second charge over existing properties if equity is available, asset finance, and commercial lending.  However, bridges offer a opportunity to access funds very fast.

Bridging Loan's Yes or No

Commercial Finance at it's Best

“I have dealt with Global Asset Finance Limited and Stephen Gruenewald personally for several years now and always found him to be very honest and approachable, well experienced finance expert who excels in his field of commercial finance.”

Stephen and Global Asset Finance Limited has raised significant finance (Crowd Funding, Venture Capital, Property Development Funding, Trade & Invoice Finance) for various project’s over the years, I have been involved with. Global Asset Finance has secured funding at the right rate and within time to complete the project.

Gary Hollings

GHM Futbol

Commercial Finance at it's Best