We are a growing company and have recently decided to go for invoice discounting. We have been through all the processes etc and we have been offered the facility at reasonable terms. But we have come across a problem.
We have a mortage for our premises with another bank and they have a charge on all the assets including our debtors. They won't release the charge on my debtors. The invoice discounting banks needs to have the charge on our debtors to protect themselves.
We have never missed a repayment (thank god!!) and both banks should have no problems with us.
We do most of our business with bank #2 and they even offered to take to mortgage from bank #1 last year. I suppose i can go than the route of bank #2 getting mortgage as well.
i am looking into bank #1 doing invoice discounting
but both of these options seem to be lenghtly in process...
Unfortunately, just because you have not missed a repayment does not mean that bank will a problem with you. The fact that you are looking to use invoice discounting shows that you are finding cash flow tough. God for bid should your company fail the bank will be exposed due to the negative equity in the mortgage and that is why they will be looking to keep a hold on the charge over the debtors.
Sorry, not much of a solution in what I have said. But before going ahead with the invoice discounting and paying bank fees etc. are you sure you have adequate control over your debtors or are there things that you could do yourself to improve your debtors days.
Jack2009 - As with most people, this year has been a lesson in cash flow. We are working hard on our debtors - Shedding Previous Bad Payers and Getting New customers that are good payers.
But the big problem is that most businesses these days are having cash flow problems which means it is a bit of a vicious cycle we are in!!
Jack2009 - As with most people, this year has been a lesson in cash flow. We are working hard on our debtors - Shedding Previous Bad Payers and Getting New customers that are good payers.
But the big problem is that most businesses these days are having cash flow problems which means it is a bit of a vicious cycle we are in!!