Invoice Factoring, Invoice Discounting & Brumark

4th November 2003

How Brumark Will Affect You

Recent FDA annual results have shown just how the banks are preparing up for a Brumark* type ruling in the UK with Invoice Discounting growth up 11%, while Invoice Factoring growth was a mere 4%.

This large growth in Invoice Discou nting facilities can be directly attributed to banks moving customers with large overdrafts over to their invoice finance divisions to cover the risk of the company going bankrupt.

Prepare yourself: If you currently operate on an overdraft facility with your bank you could soon find yourself being pressured into speaking with the bank's invoice finance division. Prepare your company by using our Marketplace to ensure you get the best terms for your business.

Invoice Factoring | Invoice Discounting

* Brumark Investments Limited - implications

Learn The Invoice Finance "Sales Speak"

Invoice finance is full of jargon. To help you find your way round we've compiled this simple glossary. Keep it handy!

Recourse/Non-recourse: A non-recourse facility comes with credit insurance meaning you don't have to pay back advances if you have bad debts.

IPP/IP: Initial pre-payment i.e. what percentage of your invoice values you will be paid immediately.

Cost of Funds: The interest rate you will be charged on the money lent to you (usually expressed in amount over bank base lending rate).

Concentration: The value of your sales ledger accounted for by your biggest client/clients.

Dilution: The ratio of credit notes to invoices you issue.

Initial Quote: Decision Finance provides an initial pricing quote for how much invoice finance is likely to cost you.

Term Sheet: Once you have met with the financier they will issue a binding quote contained in the term sheet.

Take-on: The process of integrating your sales ledger into the financier's system. This takes a couple of hours and allows you to draw down money the next day.

Invoice Factoring | Invoice Discounting

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NB: The information on this business-finance-online.co.uk is for informational purposes only and should not be treated as business, financial, or any other form of advice.