Invoice Discounting (commonly called factoring) is a disclosed or non-disclosed financial facility that is designed to improve a company’s cash flow.
Invoice Discounting provides up to 90% of the value of the approved invoices, with the remaining balance, less charges, becoming available to the client once payment is received from their customer. This facility is a recourse facility.
In addition to turning invoices into working capital, factoring provides additional services that are key to modern business.
Features of Trade Finance
- The collection of debts can be undertaken by a highly skilled team of Credit Officers who balance sensitivity with the need to collect a debt quickly and efficiently.
- PCL Money will provide regular, up-to-date sales ledger administration and control information which will give the client a true picture of their company’s sales account.
- A client can also select a factoring agreement, whereby the client will retain control over the collection of debts.
Invoice Discounting Is Suited To Clients Who:
- Have a cash flow issue created by the receipting cycle of debtors
- Are looking to make opportunities in the business a reality and require cash flow or a recapitalisation to do so
- Are looking to expand the business and require funding to meet creditor terms and stock levels
- Require a very flexible cashflow system to allow the business to reach the objectives of the directors and shareholders
- Cannot produce monthly management accounts
- Require a formalised approach to debtor management including reporting
- Can have traded negatively or positively
- The balance sheet position can be weak or strong
- Do not qualify for traditional banking products
- Are trading out of difficultly with creditors and/or the A.T.O.
The circumstances of individual clients can vary greatly thus each client is assessed and then negotiated with on an individual basis with the relevant information being provided.
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