Invoices factoring examples: Financing and business funding services UK

Factoring Example 6

Deal Type: Rescue Funding
Industry Sector: Printing
Turnover: £2.5m

A previously successful general printer encountered difficulties when it became involved in a publishing venture resulting in losses. These increased further following the mismanagement of a large fixed price contract.

By the time we were introduced there were arrears of over £350k to the Inland Revenue, pressure from its paper suppliers and a refusal by the bank to increase the overdraft. Four factors had already declined to help.

It was clear that a factoring facility on its own would not provide the answer. We therefore arranged an Asset Based Finance solution incorporating factoring, asset finance secured against unencumbered printing machinery and a freehold property. This generated £900k on a 75% prepayment basis which provided enough to clear the overdraft and mortgage and gave sufficient comfort to the Revenue to accept repayment of the arrears over twelve months.

Factoring Example 7

Deal Type: "Fresh Air"
Industry Sector: Retail Services
Turnover: £3m

This is the most unusual factoring brokerage deal we have been involved in so far.

The classic requirements for any type of invoice finance facility (factoring or invoice discounting) is that you must have provided goods or a service where delivery can be proved usually by signed delivery receipts. This client provided a mystery shopping service where there were no goods and certainly no delivery receipt (otherwise it would have been anything but a mystery).

The client had been trying for months to arrange a factoring facility to enable him to take advantage of the significant opportunities that were opening up for the business but without success and his bank were proving clueless, unless he could back it up by property.

It's not as if the client didn't have an excellent reputation and his customers were all blue chip comprising Airlines, Car Manufacturers, Major Garage Groups and High Street Stores. They would discuss with these prospects the type of service required: telephone, visual etc and price accordingly. The mystery shopping would then take place at various sites as agreed (i.e. say 6 or 7 out of 25 stores).

We discussed the problem with a specialist invoice finance provider and they were willing to provide a factoring facility where a CD/DVD is produced as evidence of the mystery shop.

Our client is now able to concentrate all its energies on growing the business by 25% per annum.

Factoring Example 8

Deal Type: Phoenix
Industry Sector: Engineering
Turnover: £2m

The engineering business had run into serious financial problems and was about to be placed into administration by its parent company (that had let it rundown).

Despite this the sales and production managers could see it was a sound business with a good client base and they decided to buy it off the administrator.

With limited funds of their own, we introduced them to a funder able to provide an factoring facility covering their working capital requirement and a Small Firms Guaranteed Loan to buy the machinery.

Timing was of the essence to ensure customer retention and safeguard the jobs of 20 employees. The funders experience in the SFGL's administrative requirements ensured the paperwork was processed in double quick time and enabled a smooth takeover of the business by the new owners.

Factoring Example 9

Deal Type:
Selective Invoice Factoring
Industry Sector:
Contract Cleaning Services
Turnover: £600k

This business had been established two months earlier with a starting capital of £1,000.

The owner lived in Turkey where he had extensive property interests but is a UK resident as is his son, the company secretary. Bored with retirement the owner decided to set up another contract cleaning business (many years experience in this field) with offices in London, Bristol, Birmingham and Manchester.

Having used two factoring companies in the past at different times and finding them less than helpful the owner was only interested this time round in a selective invoice factoring facility. He approached us to raise finance on two invoices valued at £21k and with 24 hours we arranged a meeting with an appropriate lender who arranged all the paperwork and paid out within 10 days.

A revolving facility was established at the same time providing future funding against a pre-determined list of customers selected by the client.

Factoring Example 10

Deal Type:
Inter Factor Transfer
Industry Sector:
Greeting Card Finishers
Turnover: £1m

A well established family run business specialising in putting finishing touches to greeting cards. The business and industry is subject to seasonal swings with the summer months being the busiest and the build up to Christmas.

The director's son had a separate greeting card manufacturing business which operated from the same premises with some finishing work undertaken by his fathers business. Both companies had factored with the same lender for some time but the relationship turned sour when the lender started to disallow funding against invoices from the sons business and insisted on sticking rigidly to agreed credit limits. The reduction in cash availability coupled with the seasonality issue required an alternative source of funding to improve cash flow levels.

We introduced an independent factoring provider that was not simply looking to tick boxes but took the flexible decision to treat each business as independent operations and provided an appropriate level of factoring facilities to both companies including an over advance during the seasonally quite period.