Renewed Invoice Factoring for a Derbyshire Based Courier
Some companies, particularly those that operate business to business (B2B), will often agree payments terms in the form of invoices, giving the customer a set time period in which to pay for the goods or service they have received, usually 30, 60 or 90 days.
For businesses with extended payment terms, waiting for customers to settle outstanding bills can impede their ability to meet financial obligations, fulfil orders, or invest in new opportunities, making the extraction of cash from these agreements very useful for improving their growth potential through cash agility.
In a recent case, Peter Nolan, a Magna Money advisor based in Manchester, was supporting a Derbyshire based courier business who were looking for lending support. They had payment terms with corporate customers that couldn’t be amended but they were keen to find a way to speed up their cashflow.
This is where invoice finance comes in to play. Sometimes called invoice factoring or accounts receivable financing, this lending type is a financial arrangement that has gained prominence as a valuable tool for businesses seeking to optimize their cash flow and enhance their working capital management.
However, for Peter as their broker this case was different in that the courier firm already had invoice factoring in place. In a not uncommon move, they were instead looking to refinance to another lender, as they had outgrown their previous factoring provider.
As a business, there can be a plethora of reasons for changing your factoring provider, but for this business the primary reason had been a combination of the credit limit and charges. The courier had continued to grow to a point where the borrowing appetite of their original lender didn’t cover the cash needs of their business based on it’s customer base and sales volumes.
For this client, Peter was able to look across our extensive panel of invoice finance lenders to find a new home for the courier firm, eventually placing them with Praetura. Under the new agreement, Peter had secured the client an increased facility size of £1.35 million on more competitive terms, in effect making more money available to the business at a lower cost.
