Why consider Invoice Discounting Finance?

One of the biggest issues for small and growing businesses today is how they finance growth. Historically people have used their family home as security for overdrafts.

This trend is rapidly changing and now almost 1 in 2 small businesses are now using some form of invoice finance.

In times of a down economy established lenders often tighten their loan approval processes, thus driving more businesses to seek alternative sources of funding.

In an upturning economy we see many more start- ups, with entrepreneurs commencing new ventures that will find it difficult if not impossible to source conventional funding.

Creative Capital provides immediate and liquid working capital accessibility

Our focus is on helping small businesses grow and become more profiitable by delivering them working capital that is supported by the business itself.

As a debtor finance firm specialising in invoice discounting, our client segments are those businesses that sell to other businesses (B2B) on credit terms.

There are many reasons why businesses that require working capital are especially suited to Invoice Discounting, they can be summarised generally below:

1. Growth - Your accounts receivable is a readily accessible and often untapped source of funding. It is one of the few funding resources that grows as your business expands - without the need to constantly approach your bank manager.
2. Start Ups – Invoice Discounting is an ideal facility to assist those businesses in their infancy particularly in businesses with few other tangible assets.
3. Obtain supplier discounts – The additional cash generated will enable you to negotiate discounts with your suppliers.
4. Settlement discounts – By receiving access up to 90% of invoices immediately, you can avoid offering settlement discounts to your customers, which often become expensive and permanent terms of trade.
5. No real estate – many clients using this facility have refinanced their traditional bank facilities such as overdrafts, and generally without the need for real estate security.
6. Quick creditor turn – Creditors need to be paid quicker than debts can be collected enabling you to retain the best quality staff and maintain strong relationships with key suppliers.

Invoice Discounting is a financial solution to both your working capital and cash flow management needs. It provides a flexible means of accessing capital as and when you need it without being locked in to lengthy term contracts, giving you the control of the process and the timing being linked to your accounts receivable.

It enables you to assess your specific needs and determine whether you sell single or multiple invoices depending on financial requirements at the time.

Demand for Invoice Discounting Debtor Finance continues to grow rapidly and, just like in the USA, Europe and Australasia UK businesses are recognising Invoice Discounting Debtor Finance as one of the primary and flexible tools available today.


An Invoice Discounting facility allows you to take control of your situation. You can have access to almost unlimited working capital and take on those new customers and new orders. 

All this while having complete control of your collection process. Call us now for a no equity, no collateral, no property security, grow as you grow based finance solution on 01244 561343

Isn’t this just factoring?
Is a commonly asked question when asked about Invoice Discounting Debtor Finance and our response is we don’t believe it is!

While both services provide a valuable part of financing business growth it’s worth examining the differences.

In factoring relationships with a client firm, that being the end user of the service essentially pledge all their accounts receivable to the factor in exchange for a loan. In effect this is therefore a revolving loan since it’s based on the outstanding accounts receivable at any point in time. The factor also assumes all of the accounts receivable and manages the back office administration in addition the funds loaned. This management can include such activities as credit investigation, bookkeeping, credit underwriting, monthly statement preparation and importantly all the collections for delinquent accounts. The factor also makes all the calls to their client’s customers.

Remuneration for factors is more often by the client paying initially for the loan facility on a prime plus basis and also by paying for all the administration undertaken by the factor via a charge called the commission charge – this is a percentage of the total sales and often in the range of 2% - 3% of gross sales.

It’s also common for factoring contracts to require their clients to put all their sales through the factoring structure. These contracts are generally for periods of one or more years and may also include other additional restrictive clauses.

Creative Capital Invoice Discounting is a rather more streamlined and flexible facility which involves a simple single transaction buying for cash at a discount a single or multiple group of invoices that are current.

Creative Capital is therefore not involved in lending nor are their complex administrative functions undertaken. Administration is restricted to the invoices being purchased only.

The Creative Capital facility is designed to be totally flexible and used only as and when required be it a single one off transaction, ad hoc use or regular monthly cash flow function.

There are no contracts – long or short term, nor are our clients required to put all their sales through our structure. It leaves the client firm free to select when to access the facility and as such is highly appealing to smaller businesses.

In essence the two products are complimentary, with factoring continuing to provide valuable assistance to many firms with larger and more complex needs. For those firms that require a simpler solution or just have an occasional need, then Creative Capital might well be the solution.

 
Discover the Value of Independence

With credit constraints throughout the economy the demand for short term funding has never been greater. Small and medium sized firms continue to be among the most affected and lead the charge in seeking alternative and innovative short term funding solutions to ever increasing cash flow constraints.
Creative Capital was established specifically to assist these businesses and help them to grow by improving their cash flow position and increasing the amount of working capital available to them.

Speed and flexibility create timely solutions for our clients. At Creative Capital we take a commercial perspective and view each deal on its own merits.

Creative Capital is exclusively focused on providing short term cash flow funding to small and medium sized businesses through our unique invoice discounting service. In essence, an invoice discounting facility provides your business with immediate cash in exchange for single or multiple unpaid invoices to your customers. We will advance up to 90% of the value of the invoices on generally short notice and often within 48 hours, meaning you won’t have to wait up to 30 days or longer for customer payment to access cash from your credit sales. The remaining 10% is returned to you, less a small service fee, once customers make payment.

What this means is that your business has access to a flexible, reliable supply of working capital as and when needed, to improve cash flow and grow, free of the constraints commonly encountered with other forms of cash flow finance such as overdrafts.

In addition, the funding we offer can save you valuable management time freeing you up to focus on growing your business. The funding also allows you to access credit discounts offered by your suppliers. You remain in control by working with the principals who ensure your clients are as happy to deal with us as they are with you.

Creative Capital offers a very simple and quick cash flow finance facility called invoice discounting.  It’s as easy as this:

1. The client selects one, two or more invoices that are awaiting payment and sells them to us.
2. We give the client immediate cash payment of up to 90% of the invoice values.
3. The invoices are then paid to us directly, and we take our fee and pass the residual surplus to the client.

There are no fixed term agreements, no hidden fees, and no complications.
 
Our services are particularly suitable for growing small and medium sized businesses. We are often able to help clients who do not meet traditional bank lending criteria. Unlike many funding products, we do not require property or asset security and we have no minimum term contract.

 
Why choose Creative Capital?

While the debtor finance industry continues to grow at rapid rates, our edge is our flexibility, a sensible approach, speed of execution, the commercial view we take, looking at each client on their own merits and giving you direct access to the decision makers.

Flexible Debtor Concentrations: Competitors sometimes restrict the amount of funds they will advance against a debtors account if the debtor is more than 30% of the ledger. Creative Capital has a more flexible approach and will even fund a single debtor.

Selective Finance - You choose the number of debtors you wish to finance, depending on your specific requirements. Don’t be committed to funding all your debtors

• Up to 90% funding against invoices
• Speed – we offer direct access to decision makers making faster turn around times for you.
• Direct access to decision makers
• No property security required
• Frees up other assets for additional funding such as stock, plant and equipment and property to maximise the working capital available to the business
• No full-turnover agreement needed
• No minimum term agreements
• Flexibility – use as and when needed
  

Who can benefit from using Invoice Discounting Company?

The most common indicators that you need an Invoice Discounting facility are: - When you are a new, cash flow dependant business. - When your business might rely on a small number of major customers. - When you need to finance the evolution of your turnover - When you foresee an increase in sales and you want to be able to take advantage of it. - When you simply don't want to get involved with anything other than what you do best, that is production and sales. Now you have the basics. All which's left for you to do is consider the benefits and decide if Invoice Discounting could be the solution to foster the growth of your business.

How you benefit?

• Improved control over cash flow to better fund your business
• Win business by extending terms of trade with confidence, knowing you will be paid promptly
  Meet wages, tax and supplier expenses on time with ease
• As your sales grow, so does the funding available to you
• Increase working capital to grow, free of funding constraints
• Improve margins by using better buying power to take advantage of early settlement discounts and bulk discounts on purchases
• Your existing overdraft or other loan facilities are unaffected
• No property security required, allowing owners to remove it from the business and reduce personal risk, or use it to fund expansion

Who are our clients?
A significant proportion of all debtor finance clients today are manufacturers or wholesalers but not all. A few examples of industry sectors that that have used debtor finance are:

The list above is by no means comprehensive and there are a number of other industries that are equally suited.