Factoring Guidelines

FACTORING GUIDELINES

Product Details.
Who will Factoring suit - Who is it for?
When should you speak to your Customers about Factoring - The signs to look out for?
How does Factoring with <%# PartnerName%> compare to traditional Bank finance?
Price?
What are the advantages of Factoring?
On Line Account Management.
Unique Selling Points.
Calculator.
FAQ?

Product Details

Factoring is a way of getting a large part of the money you are owed by your Customers, before they actually pay you. As part of this service the factoring company also chases and collects your debts on your behalf, inline with your own collection procedures, and can offer optional Bad Debt protection.

Financing (UK Sales only)

Fast and efficient application procedures - 15 minutes for a conditional decision
Flexible Financing - funding that will grow in line with your sales
Up to 85% funding against each invoice
Optimise possibly your largest asset
Optional Bad Debt Protection

Collections

A cost effective way of managing your sales ledger using highly professional staff
Guaranteed payment with Bad Debt protection after 120 days from due date for protracted default (subject to a "first loss")
A cost effective way to ensure you are dealing with trustworthy Customers

Who will Factoring suit - Who is it for?

Perfect for the entrepreneur who juggles too many roles such as business manager, salesperson and credit controller
Most business sectors will be considered
Most businesses, even new starts, may be considered
Business that need cash to help their business grow
Businesses who are expanding, or are looking to buy other businesses
Businesses that want the peace of mind of having its own credit control department well-versed in credit checking clients and chasing debts
Removes the emotions from what can otherwise be a difficult part of the relationship with your customer. Particularly if they are a larger customer you want to "keep on side".

When should you speak to your Customers about Factoring - The signs to look out for?

Your customer is concerned at the speed at which they are being paid
Your customer is too busy "running their business" to collect the money they are owed
Your Customers seem to be always hitting their Overdraft limit, which is restricting their growth plans.
Your Customers would like to make use of the early settlements offered by their suppliers, but do not have the available cash
Your client is worried about Bad Debts, and would like the option to have the protection we can give them
Your client wants to expand, but their bankers will not help

How does Factoring compare to traditional Bank finance

Price

Factoring Fee

Without Bad Debt Protection	:	0.60% of turnover plus VAT
With Bad Debt Protection	:	0.95% of turnover plus VAT
Cost per Invoice / Credit Note issued	:
		0-999 : £6.00
		1000-1499 : £4.00
		1500-2499 : £2.50
		2500-2999 : £2.00
		3000+ : £1.75
Rate over Base	:	2.95% above HSBC base rate
Minimum Income (with Bad Debt Protection)	:	There shall be a minimum Factoring Fee of £1,125 per Quarter, plus VAT at the rate applicable.
Minimum Income (without Bad Debt Protection)	:	There shall be a minimum Factoring Fee of £825 per Quarter, plus VAT at the rate applicable.

What are the advantages of Factoring?

Financing

Generates immediate working capital for UK debts
Reduces pressure on your cash flow
Links funding to sales providing the freedom to grow without restriction.
Up to 85% funding against each invoice raised for sales within the UK
Optimise possibly your largest asset
Operates without the limitations of traditional Bank lending
Less onerous security than a Bank

Collections

Eliminates time and money spent on credit control and debt collection
Allows you to concentrate on your core business without distraction
Helps secure preferential early settlement discounts by having speedier collections

On Line Account Management

This facility is managed entirely on line using the Internet via our secure remote access system
Our system is entirely safe and secure using a Secure site (SSL) using digital certification
You are able to draw money from us on the same day by using this online facility
The assignment of all invoices can be done on line
All reports are available via the "Client Manager" system
Any queries you may have can be addressed on line.
For your convenience, your account information is available 24hours a day, 7 days a week, 365 days a year.

Unique Selling Points

Easy and quick to arrange - Internet Based Application
Up to 85% of the value of your invoices, on receipt by the Factor.
Less onerous security than a Bank
Free Debtor evaluation (with Bad Debt Protection)
Bad Debt Protection (with Bad Debt Protection)
Transparent pricing
On Line administration
Cash when your business needs it most - Sales led financing
Headache free Sales Ledger management
You can take the emotion out of chasing money from your best Debtors

Calculator

This is a simple example of how we calculate your availability of money using our Factoring facility;

Outstanding Sales Ledger Balance	£85,000.00
Less;
Disputed debts -	£ 1,500.00
Debts over 90 days old -	£ 3,100.00
TOTAL ELIGIBLE DEBTS	£80,400.00 financed @ 85%	£68,340.00
How does this compare to traditional Bank Overdraft?
Outstanding Sales Ledger Balance	£85,000.00
Less;
Disputed debts -	£ 1,500.00
Debts up to 90 days old -	£ 6,500.00
TOTAL ELIGIBLE DEBTS	£77,000.00 financed @ 50%	£38,500.00
		---------------
TOTAL ADDITIONAL AVAILABILITY		£29,840.00
		=========

This is a simple example of how the pricing structure would work using our Factoring facility;

Total value of sales during a month	£37,500 @ 0.85% =	£318.75
Number of Invoices & Credit notes issued during a month	30 @ £5.00 =	£150.00
		-----------
Total Factoring fee		£468.75
		======

This price includes Bad Debt protection, so in the event of one of your Customers failing to pay as a result of failure or protracted default, then you will be paid by us, less any first loss.

Interest will be calculated on a daily basis on any outstanding balances owing to us, and charged to your account at the end of each month at a rate of 2.50% above base rate. This is a simple interest calculation, and not a Compound Interest calculation that a Bank will use.

Contacts
For further information, please contact Venture Factors Direct on

E Mail :

enquiry@vfdirect.co.uk

FAQ

Q: I am a small business, can I apply for this Factoring facility?

A: Businesses are likely to experience their steepest growth curve while they are young or just starting. Because of that, demands on your cash flow are particularly strong while your business is in that early phase of its development.

However, traditional funding (such as bank overdrafts and loans) is often too inflexible to cope with the needs of your young and growing business. Having to renegotiate as limits are quickly exceeded can be cumbersome, can tie up time, and often attracts additional costs and fees.

Our factoring product can help! The factoring facility grows in line with your sales, and you don't usually need to use personal assets as security.

Q: Am I suitable for this Factoring facility?

A: Factoring is suitable for sole traders, partnerships and all types of limited companies selling goods and services, within the UK, to other businesses on credit terms.

Factoring may not be cost effective for those businesses with turnover of less than £50k.

We are experienced in arranging flexible factoring solutions in most business sectors, such as, information technology, labour hire and recruitment, printing, haulage, engineering and manufacturing.

Whatever your cashflow requirements, we can arrange a facility to meet your needs:

Q: What is the difference between Factoring with Bad Debt Protection and Factoring without?

A: When you select the Bad Debt protection option for your factoring facility, you will be secure in the knowledge that if your customer ceases to trade, or fails to pay you within a specified period, you will be paid by us, the Factoring Company. (Subject to you trading within the agreed credit limit for that customer and a small first loss).

We can also help you assess the Creditworthiness of your Customers before you start dealing with them.

Without the benefit of Bad Debt protection you run the risk of possible bad debts and protracted default.

Q: I am Factoring with another company at the moment. Can I apply to you for a Factoring facility?

A: Yes. We would welcome the opportunity to receive your application, and I am sure you will find our whole service to be much more practical and efficient than that of your current provider.

Q: How quickly can I get my money once I send you my Invoices?

A: This facility is managed entirely on line using the Internet via our secure remote access system. This means that if you submit Invoices to us today, then you will be able to draw your availability from us the following day.