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Invoice Discounting

  • #1
    Registered Users Posts: 1,023 ✭✭✭ BnB


    Has anyone here ever used invoice discounting. We are currently looking at it from BOI and Ulster Bank. The problem is that because of the set fees, and because of the relatively small amount of money we would get from it (around €60k), it would work out very expensive for us.

    I just googled it there and there seems to be a number of private companies also offering the service. Does anyone know anything about any of them ? Are they cheaper or more expensive than the banks ?


Comments



  • Is this discussion of it on 'small business can' of any use?

    I've no experience of it myself, but I might suggest having a chat with Olwen of IBI (one of the posters in that thread) who appears to have an excellent knowledge of it and has always been a pleasure to deal with in the past.




  • Invoice discounting is only cashflow beneficial to your company for the first month of the agreement, and after hefty 'admin' charges have been added. Then any invoices that haven't been paid will be deducted from the next batch of invoices you have. Three months down the line and you have the same cashflow problems but you now owe the factoring company money as well!

    We looked at it once but our solicitor warned us of it after reading their factoring agreement.

    There are cheaper options, like a bank loan, but whether you will get one of those now, if you are experiencing cashflow problems, is debatable.

    You could also try offering discounts to your clients for early payment of invoices. Although this can create problems with clients taking the discount but still not paying on time. :mad:




  • We have used both Ulster and Boi Invoice Discounting in the Past
    (Business closed down now).
    You say you need €60K, I assume your "APPROVED" debtors ledger balance is about €75-€100K. They usually offer between 80-90% of your "approved debtors"
    I.E. They do an audit of your debtors and pick out any potentially dodgy clients.
    It is a very expensive and very time consuming way of raising finance, but is classified as "Finance of last resort".
    When I say time consuming, there are a lot of reports and reconciliations every month and an Audit usually once every 3 months. (Audit lasts about a day).
    Please avoid the smaller ones like Bibby and Celtic I.D. as they take on smaller ones but charges are much higher.
    You will get a lump sum up front that you can drawdown as much or as little as you like. you then assign you invoices on a daily or weekly basis and they then advance you 80% of the amount of invoices. they give you the balance 20% when you get the cheque in from your client.
    If you have clients that regularly run into owing you money over 3 months, they will be disapproved (I.E. the I.D. Company will deduct any moneys that are in the 3 months plus section of your debtors ledger and will only finance the balance.)
    There's usually a flat fee of about €500 or so per month and then you pay the normal overdraft interest rate on the amount of finance you have drawn down.
    Invoice Discounting is where you assign you debtors to them and you manage your own invoicing and collections.
    Factoring is where you sell you debtors (Bibby being the biggest here), but to the best of my knowledge, the factoring company takes on the role of collecting monies owing (Usually quite agressively)- Possible result - Lost clients.
    Both BOI and Ulster have good software that allows you to "Assign your invoices" and the system will tell you what is available to "Drawdown", you can then take as much or as little as you like or need. This will be transferred to you bank current account then.
    I think I have covered mostly everything.
    Feel free to throw any more questions about this type of finance if you like.




  • BnB wrote: »
    Has anyone here ever used invoice discounting. We are currently looking at it from BOI and Ulster Bank. The problem is that because of the set fees, and because of the relatively small amount of money we would get from it (around €60k), it would work out very expensive for us.

    I just googled it there and there seems to be a number of private companies also offering the service. Does anyone know anything about any of them ? Are they cheaper or more expensive than the banks ?

    Hi,
    IDing is an expensive way to raise cash flow so before you go down that route what have you done to collect the invoices yourself.

    You may have tried the following, so apologies for restating the obvious...

    1) Print off all outstanding invoices with statements.
    2) Fax or e-mail to relevent clients.
    3) Phone contact to confirm receipt.
    4) Notify clients that reps will be visiting on morning of "pick a day" to collect payments.
    5) Visit all clients with copies of same. Decide on an acceptable maximum discount you'll offer if pushed, but only as a last resort and stick to it.
    6) I'd be surprised if you don't collect some payments.
    7) Any that are still not paying can't be factored anyway, so I'd seriously review your collection method for these immediately.
    8) If you don't have the manpower to do it all yourself there are co's out there that can do it for you. No I don't mean "The Viper!".
    9) You could also look at DDing for future invoice payments. Build DD into your terms any way.
    10) Also put late payment penalties into your terms.

    Bottom line is you need to reduce your cost of collection so paying your team/yourself a days wages to collect moneys owed is worth it. Anything to keep the bank manager from noising around your books has to be worth a lot.

    Apologies again for stating the obvious, but you'd never know until you try.

    Please do let us all know how you get on.
    Best of luck.




  • I've no experience of using an invoice discounting/ factoring service myself.

    But I'm familiar with suppliers of ours who use them - Bibby Trade Factors seem to be one of the most popular ones.

    I don't know what it's like from a cost perspective. But from our own perspective I've found that the couple of suppliers who use Barclays have become a pain in the neck. The Barclays staff handle the accounts and chasing up payments on behalf of the supplier. But I find they always mess everything up. I often have to relay the same message to Barclays and to the supplier on separate occassion, and there's always some confusion and lack of communication between the two.

    Companies using factoring services also always seem to be under real stress to get paid. The suppliers often ring days before the payment is due looking for payment. I presume this is because the factoring company puts them under a lot of pressure.

    Afaik, the fees are quite large


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  • Sincere thanks for all replies
    kol1965 wrote: »
    You say you need €60K, I assume your "APPROVED" debtors ledger balance is about €75-€100K. They usually offer between 80-90% of your "approved debtors"
    I.E. They do an audit of your debtors and pick out any potentially dodgy clients.

    Yes, our Debtors balance is around €100k.

    About €20k of that is unsuitable as they are customers we invoice at the start of a period which makes them unsuitable for Invoice Discounting. (i.e. We have a contract with the customer and we invoice at the start of each 3 month period - So for Jan, Feb, Mar we would invoice in Jan)

    We shouldn't have any problem with customers being unsuitable other than that as it is mostly Multi Nationals and a few state bodies that we deal with. We have had an initial meeting with the BOI rep and she did think our Debtor list was suitable.
    kol1965 wrote: »
    There's usually a flat fee of about €500 or so per month and then you pay the normal overdraft interest rate on the amount of finance you have drawn down.

    Yes, the Ulster Bank Flat fee is €5k per year. Fairly steep for the relatively small amount we would be looking to draw down. However, the BOI flat fee is only €1k per year which is reasonable enough
    kol1965 wrote: »
    Invoice Discounting is where you assign you debtors to them and you manage your own invoicing and collections.
    Factoring is where you sell you debtors (Bibby being the biggest here), but to the best of my knowledge, the factoring company takes on the role of collecting monies owing (Usually quite agressively)- Possible result - Lost clients.

    Yes, Invoice Discounting would be the only one we would consider. I wouldn't have anyone else contacting our clients directly for money.
    AndyJB wrote: »
    Hi,
    IDing is an expensive way to raise cash flow so before you go down that route what have you done to collect the invoices yourself.

    You may have tried the following, so apologies for restating the obvious...

    1) Print off all outstanding invoices with statements.
    2) Fax or e-mail to relevent clients.
    3) Phone contact to confirm receipt.
    4) Notify clients that reps will be visiting on morning of "pick a day" to collect payments.
    5) Visit all clients with copies of same. Decide on an acceptable maximum discount you'll offer if pushed, but only as a last resort and stick to it.
    6) I'd be surprised if you don't collect some payments.
    7) Any that are still not paying can't be factored anyway, so I'd seriously review your collection method for these immediately.
    8) If you don't have the manpower to do it all yourself there are co's out there that can do it for you. No I don't mean "The Viper!".
    9) You could also look at DDing for future invoice payments. Build DD into your terms any way.
    10) Also put late payment penalties into your terms.

    Bottom line is you need to reduce your cost of collection so paying your team/yourself a days wages to collect moneys owed is worth it. Anything to keep the bank manager from noising around your books has to be worth a lot.

    Apologies again for stating the obvious, but you'd never know until you try.

    Please do let us all know how you get on.
    Best of luck.

    Andy, we do not really have a huge issue with collecting money, although that said, we are looking to improve it and you have a lot of good tips above.

    The type of business we are in, luckily enough, we don't have to deal with too many messers.

    However, the fact of the matter is, we are always going to have at least €70 or €80 k on our Debtor books. It is not dead in that it is always rotating, but it will always be there.

    We (like a lot of small businesses) are getting our proverbials broken by the banks in trying to get working capital off them. Their big issue with us is that we don't have any security for the money we need and our Debtor List is the only thing we can look at using for security.




  • BnB wrote: »
    Sincere thanks for all replies



    Yes, our Debtors balance is around €100k.

    About €20k of that is unsuitable as they are customers we invoice at the start of a period which makes them unsuitable for Invoice Discounting. (i.e. We have a contract with the customer and we invoice at the start of each 3 month period - So for Jan, Feb, Mar we would invoice in Jan)

    We shouldn't have any problem with customers being unsuitable other than that as it is mostly Multi Nationals and a few state bodies that we deal with. We have had an initial meeting with the BOI rep and she did think our Debtor list was suitable.



    Yes, the Ulster Bank Flat fee is €5k per year. Fairly steep for the relatively small amount we would be looking to draw down. However, the BOI flat fee is only €1k per year which is reasonable enough



    Yes, Invoice Discounting would be the only one we would consider. I wouldn't have anyone else contacting our clients directly for money.



    Andy, we do not really have a huge issue with collecting money, although that said, we are looking to improve it and you have a lot of good tips above.

    The type of business we are in, luckily enough, we don't have to deal with too many messers.

    However, the fact of the matter is, we are always going to have at least €70 or €80 k on our Debtor books. It is not dead in that it is always rotating, but it will always be there.

    We (like a lot of small businesses) are getting our proverbials broken by the banks in trying to get working capital off them. Their big issue with us is that we don't have any security for the money we need and our Debtor List is the only thing we can look at using for security.

    Morning,
    Running with the ebb and flow of a 30 or 60 day invoice model will always leave you with floating debts.

    There are a few things you could do/try.......

    1) Up your customer care calls/visits to existing clients. Confirm that all is OK with product/service delivered.

    Don't k know what your product/service is, but ask clients how they would like it improved. A small tweak for one could be sold to others or issued as a free upgrade thus aiding your PR in your target sectors.

    2) Get all contact details (phone no's & e-mail) for your clients various teams especially accounts payable.

    3) Tighten up on your debtor management ie On day 30 call them (politely!)

    4) Put your bank details on invoices and account statements.

    5) Review the up selling into existing clients. Item 1 on list will help with this.

    6) Have you thought about taking in investors? You'd need to put plans together but you're probably halfway there anyway in your discussions with the banks about factoring.

    7) Increased sales will certainly help your situation. Keeping in mind your production costs your sales would also have to be managed.

    8) You should review your sales team performance and techniques. You mention you deal with state bodies, what will their budgets be like in 12 months?

    9) Have you looked at doing business in the UK or EU with similar client types? Most places in Ireland are only 1hr or so from major UK populations centres. UK business like everyone else want value and service. Enterprise Ireland love the export thing and would also be worth having a chat with.

    If we can keep our/Irish costs within sensible limits Irish organisations can certainly exploit, profitably, the UK and EU markets.

    Best of luck.




  • Hi

    I've been dealing with Celtic Invoice Discounting for the last few years.

    I'm selling to shops so if they don't want to go for the discount I offer for prompt paymet I use these guys.

    Its very handy when you know youre not going to get paid for a few months.

    The deal is supposed to be 75% upfront with the rest following when the invoices come in. Works out about 5-6% of the invoice cost.

    Good thing is that you can choose which invoices you allocate, rather than signing over the whole debtors schedule.

    The payment usually arrives within a few weeks - not always at the 75% rate mind, but they are straight and very pleasant to deal with. They will not chase your customers unless theres egregious lateness. Some companies can be aggressive and thats no plus

    Might be an option for you.

    Bibby I looked at too, they will give you up to 80% up front but want all your debtors. Not an option for me. They do let you log in online and see whats been paid, allocated etc, so that will suit some better. especially as they are worldwide - handy if doing business abroad. Celtic can be a little bit "approximate" in that they will usually issue a cheque to the nearest 100 rather than being German about it.

    Clancy are another option but I tried ringing and leaving a message and noone replied so that was enough for me.

    Hope that helps




  • BnB wrote: »
    Has anyone here ever used invoice discounting. We are currently looking at it from BOI and Ulster Bank. The problem is that because of the set fees, and because of the relatively small amount of money we would get from it (around €60k), it would work out very expensive for us.

    I just googled it there and there seems to be a number of private companies also offering the service. Does anyone know anything about any of them ? Are they cheaper or more expensive than the banks ?

    Hi BnB,

    While I'm based in Australia, from what I understand invoice discounting works basically the same except it's more commonly called debtor finance. It can definitely eat into your profit margin but for some businesses such as smash repair which need to wait a long time for insurance companies to pay bills, it gives them the cashflow they need to continue to operate.

    I set up my mate with these debtor finance guys and I'd be happy to offer you advice based on our experiences :)




  • Some simple rules to follow if you are planning to use an invoice discounting company. If they are a small, independant Irish invoice discounter then go to the Companies Registration Office and get their last two years annual returns. Have they been submitted late? late returns and company failure are related. Do they have a qualified audit opinion from their auditors? Ask a company such as Solocheck for a credit report, around €6.00, which will give you an analysis of their balance sheet. If they are providing financial services then do they have any meaningful cash balances in their account at the financial year end? Then make a decision on what you want to do. Then read the agreement carefully and make sure the discounting company keeps to their side of the agreement


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  • Scottie47 wrote: »
    Some simple rules to follow if you are planning to use an invoice discounting company. If they are a small, independant Irish invoice discounter then go to the Companies Registration Office and get their last two years annual returns. Have they been submitted late? late returns and company failure are related. Do they have a qualified audit opinion from their auditors? Ask a company such as Solocheck for a credit report, around €6.00, which will give you an analysis of their balance sheet. If they are providing financial services then do they have any meaningful cash balances in their account at the financial year end? Then make a decision on what you want to do. Then read the agreement carefully and make sure the discounting company keeps to their side of the agreement
    The only businesses I have seen using invoice discounting sucessfully are ones that have big margins.

    If you are a company that re-sells goods at a 20 or 25% margin, then 5% of your turnover is quarter to one fifth of your Gross Profit. Thats a shedload of your money, so think before using ID.

    It's expensive money where, if you hired someone in to collect the money 5% of your sales would go a long long way to paying their wages for a day or 2 a month just on credit control.




  • Hi
    We are a small Company who got into invoice discounting in 2005 for the first 3 months it was good but after that a disaster . Limits were very small on our clients any thing over limits were dissapproved any debth over 60 days were dissapproved . Cash flow dried up twice as quick as before it is also too expensive on a ledger of about 150k last year it cost 11k after all their charges were included.
    We are now in the process of exiting this facility and i feel that it may put my company under as the bank have placed large dissapprovals on my account over the last 3 months ( dissapproval of 21k on a ledger of 60k for 1 month) 80% of my clients pay on 35 days but would be over there allowed limit 15% would be 60days and maybe 5% 90-120 days .
    We have looked to get limits increased on our clients but have got refused.
    My advice is stay away from discounting and look for increased overdraft it is cheaper on the long run .




  • Hi , I know of a few Companies that have used Invoice Discounting ...some successfully ...more not so successfully. The problem is that they are not honest in their brochures ...they promise 80 or 90% prepayments but you rarely , if ever get this because they "disapprove" either debtors or individual invoices and you cannot predict with any confidence what you will get cash flow wise.
    It is probably better to use a Bank owned Factor or Discounter as the smaller outfits make up their own rules and are not concerned about adverse publicity at all. Some of these smaller providers are looking to asset strip all the assets by making a Company go bust ...there should be a law against this ...they are destroying jobs !
    Key things to agree in Ireland is to insist on 120 days minimum financing on ANY invoice , also that any single debtor can account for up to 50% of the total debtors ledger with FULL funding still to take place. You also need a minimum of an 80% prepayment AND a guarantee to get back the other 20% less your charges ! Never sign unlimited Personal Guarantees - they ( The Factoring Companies) will sue you for everything including your house !) Try to sign nothing but , if you have to , only a guarantee to approx 10% of the amount outstanding to protect yourself. There are BLOGS online that will reveal some of the scurrilous antics of disreputable providers in the UK and Ireland - look them up and be warned ...some of these guys are sharks ...apparently its an unlicensed , unregulated activity ...it should be both licensed and regulated.




  • Hi Deepman,

    Out of interest, do you think that invoice discounting (through a bank, not the private companies offering the service) is more suitable to larger enterprises/companies. Particularly if there debtor book is more substantial and made up of debtors who are quite reliable? Whereas for smaller enterprises, ie with debtor book of less than 150k, the costs are excessive.

    I just find it interesting in the current climate as I am hearing anecdotally about people/companies who may need to increase there leverage via overdraft/loan facilities and have the banks trying to strong arm them into this option.

    Not trying to be a merchant of doom, but if this is the case and they are pushing invoice discounting, it seems to indicate the banks are still not lending. I find it annoying when I hear about growth in housing market/tax take etc being shouted from the roof tops as indicators that Ireland has "Celtic Phoenix" rising out of the ashes, whilst very real problems with businesses getting finance are brushed under the carpet.

    I'd just be interested to hear other peoples opinions on this.




  • Hi Goon , it is probably true that Banks will try and strong arm Customers into using Invoice Discounting rather than overdraft or term loans as ID is more profitable and better security for them ( The Banks) . There are still widespread rumours and belief that Banks are not REALLY lending ...they are including everything such as renewals , roll overs and refinancings into the "New Lendings" pot to fool the public and Government. remember that the ECB instructed the Irish Banks to basically halve their combined loan books from 2008 highs. Word is that the Banks are hoarding cash to ensure they pass the ongoing stress tests and to provide for hidden losses not yet divulged to the Government or Public.

    The issue of Big Bank Invoice Discounting Companies versus smaller private ones is interesting because the Big Banks try and maintain a reputation of some sort whereas the smaller privately owned Companies act like mavericks and have loads of potentially hidden charges in their agreements. As an unregulated activity any user of ID or Factoring or other asset transferral mechanisms there is no Ombudsman to appeal to in the case of abuse of over charging .

    For smaller SME's however they may not have much of a choice as some of the Bank owned ID or factoring Companies will not provide facilities of less than €150,000 so smaller Companies are stuck with dealing with potential sharks. Always best to ensure that your Accountant and Solicitor goes through the term sheet and ALL the documentation before you sign anything.

    There is no going back to the pre 2008 lending days though ...Banks were throwing money at people . What Ireland needs is a combination of things like a new ICC , Some Non Bank Lending or Funding mechanisms and perhaps even a State sponsored Invoice Discounting Company that would offer genuinely fair terms ....




  • I have used invoice discounting for about 20 years I was fiercely against it initially but was forced to go into it by the banks inability to lend against my biggest asset my book debts. Since then my attitude has changed I don't find it expensive, it is not very bureaucratic ( an audit every year or so) It works very well when you have debtor balances that can fluctuate. However Once you are in it could be hard to get out if it didn't suit your business. I would suggest you thrash out every detail of how your business works with the provider to make sure you both understand ther issues you both have and he understands your business model . Our debtors vary between 400,000 and 1,200,000 I would not dismiss it. where else will you get significant cash to fund your business?




  • Thanks for the reply Deepman, very interesting and pretty much confirms in my mind that while things may be improving, there is an elephant in the room.. the banks. Things can't improve while we have a banking system which is misfiring so badly.

    Terryhobdell, its great to get some perspective from someone who uses ID. It seems that the larger and more stable your debtor book, the more sense it makes as a service. Especially compared to overdraft costs and so on. The problem I have is that as you say, where else are you going to get cash to fund your business other than by invoice discounting/

    So many businesses were cut adrift by their banks after 2008 and have only survived by streamlining, heavy overdrafts and non bank lending. It is no secret that many SME's are on the brink of going under because they can now not get finance to push on and grow back into themselves.




  • I’m not fully in agreement with all of Deepman’s comments. There is no real conspiracy to screw small companies with hidden charges. Also, a minimum amount for ID has to be a part of any realistic business model, the set-up costs generally are about the same whether the facility is for euro 150, 250, or 500 k. Many of the factoring companies operating in Ireland are directly registered with the CBI and I think there might be confusion on the roles of the ‘Ombusdman’ (who deals with consumers) and the Credit Review office?

    The banks are doing some, but not a lot of lending. Most are terrified, many have lost whatever skills/confidence they had, have no idea of a borrower’s worth due to imponderables on a balance sheet – values of the book debts and assets (property/plant), etc. Intangibles have never been more intangible. So the outcome is 'Never make a loan, never make a mistake, never have a threat on your job.' I agree that the Irish banks appear to be massaging their figures by converting O/Ds to term loans or switching to alternative forms of finance and counting that as ‘new’ lending. The skillsets in Irish banking have sunk to a deplorable level.

    When comparing ID and Factoring there are huge differences in costs and charges. Assuming we are discussing invoice discounting, the first question should be is it recourse or non-recourse? Is there a credit insurer involved i.e. has the company or the discounter got a credit insurance policy? (rates/costs change accordingly) Twenty years ago ID was only coming into its own as a means of finance, prior to that factoring was the norm. At that time factoring was seen as a sign of financial weakness and unpopular for that reason. ID was usually ‘undisclosed’ hence its growth in popularity.

    Like any medium to long transaction ID needs to be examined carefully. Smaller providers of finance have to borrow from the market at higher rates so they generally will be more expensive than the bank-owned specialists. Will you use ID for domestic or export sales or both? What are the set-up fees? What is the commitment fee? Draw-down fees? On what basis is the interest rate calculated? What happens when there is an overdue invoice or a non-payment?

    As for its usage in the Irish market, there are several very large companies using invoice discounting. Several publically traded cos (not sure about Ireland but I do know of one) use it and also have done six-seven figure securitization deals on trade debt. AFAIK all these CDO's have been by private placement and are not traded. For any company ID can be a useful tool if set up and managed properly taking into account cashflow needs, length of credit on invoices, retention amounts, rates and charges/fees, etc. However, it is not for everyone.




  • ID, in my experience is cheaper than OD and works well for many growing business or those with relatively high level of debtors. I have used it in the past and used the funds released to negotiate 7 day cash discounts from suppliers... can soon become a profit centre in it's own right with decent numbers. One word of caution, it can put massive pressure on a business when sales revenues decline, so it needs to be forward monitored in terms of projected cash flows!!




  • I agree, the skill sets in Irish banking right now are shocking! They have lost staff with knowledge/experience and morale has been sapped from those still there. Nobody seems capable/ allowed make decisions or take action. Nothing happens and things move a dismal pace.
    I say this from my own experience both personally and professionally and base it on first hand knowledge of everything from mortgage applications to companies looking for loans, to people trying to do deals with the banks. You talk to the bank manager who relays it to someone else, and then they do the same. The whole system is crumbling. If you have cash, there is money to be made dealing with very reputable and profitable companies paying substantial interest on short to medium term investments, simply because it is almost impossible for them to access funds through banks.


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  • ID is great in a growth situation - however it is like a drug that is very hard to get off - I agree with pedronmix that ID facilities cause major cashflow problems when sales fall. ID is not readily available as the bank wants to be very comfortable with the customer and the debtor book. the bansk are not great at offering id where there is a concentration of overseas debtors. It is capital light for the banks, profitable however there is risk for the bank as it is based on trust.




  • I agree that ID can be useful in certain situations such as high growth in sales or where there are substantial cash discounts to be had on purchases etc BUT BUT BUT ...Caveat Emptor ( Let the Buyer beware) ....when assessing overall costs against an overdraft or term loan you must look out for many potential hidden costs such as daily compounding of interest or long clearance days on cheques or even direct electronic transfers )or even large "prepayment" charges of between €20 - 50 to get YOUR OWN MONEY EVERY DAY !!!!

    I repeat ....Invoice Discounting is not regulated by the Central Bank and therefore so called "self regulation" whether by an Industry Association or whatever is USELESS !!!!

    If you are considering Factoring or Invoice Discounting ADD up ALL the charges they debit to your account ( they are not transparent about this unless you demand to know !) . If you sign the agreement without having it read by your Solicitor then you will end up in trouble . The Contract is , naturally , 100% in the Factors favour .

    Also look up some of the BLOG's run the internet about some of the Independent Factors and Discounters , mainly UK but still applicable to Ireland to get an insight into what I am referring to in terms of being ripped off.




  • Deepman wrote: »
    I agree that ID can be useful in certain situations such as high growth in sales or where there are substantial cash discounts to be had on purchases etc BUT BUT BUT ...Caveat Emptor ( Let the Buyer beware) ....when assessing overall costs against an overdraft or term loan you must look out for many potential hidden costs such as daily compounding of interest or long clearance days on cheques or even direct electronic transfers )or even large "prepayment" charges of between €20 - 50 to get YOUR OWN MONEY EVERY DAY !!!!

    I repeat ....Invoice Discounting is not regulated by the Central Bank and therefore so called "self regulation" whether by an Industry Association or whatever is USELESS !!!!

    If you are considering Factoring or Invoice Discounting ADD up ALL the charges they debit to your account ( they are not transparent about this unless you demand to know !) . If you sign the agreement without having it read by your Solicitor then you will end up in trouble . The Contract is , naturally , 100% in the Factors favour .

    Also look up some of the BLOG's run the internet about some of the Independent Factors and Discounters , mainly UK but still applicable to Ireland to get an insight into what I am referring to in terms of being ripped off.

    Caveat emptor is a clichéd idiom and equally applicable to buying a line of finance, a franking machine or a delivery van.
    You continue to conflate factoring and invoice discounting, when the legal and operational basis of both are quite different. Similarly, you group together discounters & factors in the UK and Ireland, which is not appropriate because there is no real basis for comparison. The biggest Irish ID/factoring companies are subsidiaries of regulated entities, and would be very aware of the outcome on the parent of any ‘misbehaviour’.

    Many of the blogs you suggest people should read about ‘being ripped off’ are in reality one-sided and written by those who did not obey the pre-agreed rules and paid the price. Tough. Misbehave, disobey the rules and you will be smacked down in any relationship.

    It’s quite obvious from your sum total of 3 posts that you do not like invoice discounting and factoring companies. Other than a Vox clamantis in deserto or a rant, what is your point?




  • It simply beggars belief to see the numbers of supposed businesspeople who enter legally binding contractual arrangements without fully researching and understanding the terms of the contract. To be surprised or upset afterwards is the mark of a fool!




  • Totally disagree with you both .... P1 do you work in this industry ? I ask this question because you are totally blind to its potential drawbacks !
    If you read my post correctly you would see that I actually think ID is good in both expanding situations and also where there are substantial discounts to be had from suppliers therefore I am not against ID . What I am saying is , to repeat , that you have to be VERY careful it is the right option . It is unregulated and this means that the ID and factoring Companies do not have to do certain things such as post the Average Percentage Rate (APR) applicable to monies. In some cases the charges , in aggregate , are close to usurous credit card rates of 20 - 30% per annum depending upon the amount drawn down ! As for putting ID and Factoring in the same spotlight this is entirely right - they both rely on the sale of an invoice and further all Invoice Discounting Companies reserve the unilateral right to disclose the assignment and collect in the debts themselves. ID is really undisclosed factoring.The differences you point out are spurious. From a query I made on the internet just now it seems that the governing Industry body is a British AND Irish one and many providers in Ireland ( not all) are UK owned so my point still stands about UK and Irish comparisons ...not all the blog contributors are wrong - there is clearly some abuse of Clients happening.People in Ireland are sick of Banks using bullying tactics and relying on totally lop sided conditions in documents.
    As to PX's assertion about fools only signing agreements He must be naive in the ways of business as Banks often put a gun to the head of Companies to switch facilities or else . Also high pressure selling methods employed by unregulated entities adds to this problem where they gloss over major issues such as right to disclose or charging additional fees.
    I speak from experience of having worked for two different Companies that have actually used ID , one successfully and one very unsuccessfully. Invoice Discounting is useful in certain defined circumstances but certainly not in many others. Banks may favour it as a means of additional security as well as increasing their return so again I say ...be careful ! Make sure both your Solicitor and Accountant agree that it is a good option and that ALL the documents are thoroughly vetted ( get the documents sent to you as soon as possible for this purpose , don't let the provider send them out at the last minute and rush you into signing.




  • Please do not selectively chose what I wrote to try to stand up your argument, I said "without fully researching and understanding the terms of the contract". Unlike you it appears, I actually owned the companies in which we used ID. I don't get your agenda here, like lots of things in life, there are good players and bad players!




  • Deepman wrote: »
    Totally disagree with you both .... P1 do you work in this industry ? I ask this question because you are totally blind to its potential drawbacks !
    If you read my post correctly you would see that I actually think ID is good in both expanding situations and also where there are substantial discounts to be had from suppliers therefore I am not against ID . What I am saying is , to repeat , that you have to be VERY careful it is the right option . It is unregulated and this means that the ID and factoring Companies do not have to do certain things such as post the Average Percentage Rate (APR) applicable to monies. In some cases the charges , in aggregate , are close to usurous credit card rates of 20 - 30% per annum depending upon the amount drawn down ! As for putting ID and Factoring in the same spotlight this is entirely right - they both rely on the sale of an invoice and further all Invoice Discounting Companies reserve the unilateral right to disclose the assignment and collect in the debts themselves. ID is really undisclosed factoring.The differences you point out are spurious. From a query I made on the internet just now it seems that the governing Industry body is a British AND Irish one and many providers in Ireland ( not all) are UK owned so my point still stands about UK and Irish comparisons ...not all the blog contributors are wrong - there is clearly some abuse of Clients happening.People in Ireland are sick of Banks using bullying tactics and relying on totally lop sided conditions in documents.
    As to PX's assertion about fools only signing agreements He must be naive in the ways of business as Banks often put a gun to the head of Companies to switch facilities or else . Also high pressure selling methods employed by unregulated entities adds to this problem where they gloss over major issues such as right to disclose or charging additional fees.
    I speak from experience of having worked for two different Companies that have actually used ID , one successfully and one very unsuccessfully. Invoice Discounting is useful in certain defined circumstances but certainly not in many others. Banks may favour it as a means of additional security as well as increasing their return so again I say ...be careful ! Make sure both your Solicitor and Accountant agree that it is a good option and that ALL the documents are thoroughly vetted ( get the documents sent to you as soon as possible for this purpose , don't let the provider send them out at the last minute and rush you into signing.

    Well, that clears it up. It’s a rant, you have not properly read my earlier posts. I’d guess you probably sleepwalked into a bum deal, paid the price and now have a big chip. Silly you.

    You have no idea as to who I am or what my experience is. To suggest that I am totally blind to the drawbacks of ID and factoring is insulting and also selectively ignores earlier posts I made on some of the drawbacks. (Nor did you post everything you claim in the above.)

    I do not work in the ID sector but throughout my career I have been involved in various forms of asset / trade finance , have structured short, medium and long term asset or trade finance based deals from poxy little ones to help SMEs, to syndicated loans on BOO/BOT projects and securitizations.

    I do not have the time to give you a lecture on the differences between ID and Factoring, (despite your claims to the contrary they are NOT the same) so suffice to say if you do not know that AND have to run to the internet (From a query I made on the internet just now it seems etc.):rolleyes: you have no business trying to lecture people, particularly those who clearly know more than you on the topic.

    What you have written shows you to be out of your depth. Go away and read what both the other Pedro and I have written .


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