Why Asset Based Finance?

For many companies debtor balances are the largest asset in the balance sheet. They may also turn into cash at a much slower rate than the business would like, often representing two or three months’ sales.

The Factoring, Invoice Discounting and Asset Based Lending industry has been solving these problems for over 40 years in the UK, providing a range of valued options –

If slow paying customers are the problem a full Factoring service provides comprehensive collections and credit management services designed to obtain faster payment from customers without harming goodwill. Moreover, there is no need to wait until customers pay: the factor pays up to 90% of outstanding invoices immediately and the balance when the customers pay.

If you already have sound credit management and simply want to speed up cash flow, the Invoice Discounting alternative provides a similar immediate payment with the balance, less charges, when customers pay.

Either service may be available on export sales as well as UK sales, and some member companies provide the option of bad debt protection.

The industry’s understanding of the working capital needs of the small and medium-sized business sectors has led some members to extend their services to cover other forms of Asset Based Lending, primarily but not exclusively secured against stock values and existing plant and machinery. Asset Based Lending is a emerging product. It delivers sophisticated solutions for a variety of scenarios including growth, MBOs, MBIs, mergers and acquisitions, refinancing, turnarounds, and public to private transactions (across both a European and a global arena). There are multi-million pound deals, cross border deals done, and many multi-national companies are waking up to the realisation that this is a very flexible and exciting financial product which has proven its reputation within various economic cycles.

For further information, click here to download our Guide to Asset Based Finance.