How to Use Invoice Factoring and Survive the Recession
Its now a blatant fact that the United Kingdom Economy is in decline and Company Directors interested in their Companies existence must have a plan or they will most certainly go into liquidation
The tricky trading conditions over the Christmas and New Years holiday season saw a record level of shops go bust
Stores and Companies to be effected by the recession are Savvi the music retailer formerly Virgin Megastore, Adams the Independent childrens clothes retailer, USC the Fashion store and Whittard of Chelsea, the specialist tea and coffee retailer.
Another victim of the recession has been our beloved Woolworths that went into administration just before Christmas and saw its final stores close on the 5th of January 2009, which has left 27,000 people facing redundancy.
A business owner should be thinking how can I survive this economic downturn? The Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a credible management team, a viable business core, a valid business plan and appropriate funding.
The credit crunch and lack of liquidity within the financial money markets has restricted traditional forms of lending from Banks into Businesses to very dangerous levels. This limitation of funding has implemented a Cash Flow Squeeze on British Business.
Company Directors with an eye on survival should immediately have a plan to reduce expenditure within the business. Carefully review expenditure to identify any areas of your business where savings can be made. Meticulously going over the Companies expense to find areas where costs can be cut. You should look at Telephone Charges and Tariffs, Utilities, Trade Suppliers, distribution costs. The build up of a number of cost saving can be remarkable.
Cash Flow within a business is vital at any time but even more so in a recession and having access to working capital should be at the top of any business owners list. Funding a business with invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all Companies, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice finance provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the finance company will recover the money provided to you initially from any further invoices which are factored. This can lead to erratic cash flow if customers are poor payers or they go into insolvency.
The tricky trading conditions over the Christmas and New Years holiday season saw a record level of shops go bust
Stores and Companies to be effected by the recession are Savvi the music retailer formerly Virgin Megastore, Adams the Independent childrens clothes retailer, USC the Fashion store and Whittard of Chelsea, the specialist tea and coffee retailer.
Another victim of the recession has been our beloved Woolworths that went into administration just before Christmas and saw its final stores close on the 5th of January 2009, which has left 27,000 people facing redundancy.
A business owner should be thinking how can I survive this economic downturn? The Turnaround Management Association says that for a business to achieve a successful turnaround it needs four things; a credible management team, a viable business core, a valid business plan and appropriate funding.
The credit crunch and lack of liquidity within the financial money markets has restricted traditional forms of lending from Banks into Businesses to very dangerous levels. This limitation of funding has implemented a Cash Flow Squeeze on British Business.
Company Directors with an eye on survival should immediately have a plan to reduce expenditure within the business. Carefully review expenditure to identify any areas of your business where savings can be made. Meticulously going over the Companies expense to find areas where costs can be cut. You should look at Telephone Charges and Tariffs, Utilities, Trade Suppliers, distribution costs. The build up of a number of cost saving can be remarkable.
Cash Flow within a business is vital at any time but even more so in a recession and having access to working capital should be at the top of any business owners list. Funding a business with invoice factoring, which is increasingly popular for small to medium businesses. While not suitable for all Companies, the huge benefit of invoice factoring is that rather than have money tied up in invoices that are yet to be paid, you can receive an initial payment up front, typically 80% - 85% of the gross value, and the remainder when the customer pays the invoices to an invoice finance provider, less the service fee which has been negotiated with them. However, if the customer defaults on payment, then the finance company will recover the money provided to you initially from any further invoices which are factored. This can lead to erratic cash flow if customers are poor payers or they go into insolvency.
About the Author:
Invoice Factoring is provided by the Asset Based Finance team of Enable Finance Ltd. Enable Finance are professional corporate finance company providing UK business access to traditional and alternative sources of finance. For a free consultation please contact the Business Refinance Team.
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