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FAQs


CREATIVE INVOICE FINANCE

What is invoice finance?

Invoice finance allows SME’s in a business to business environment to draw down money against sales invoices before the customer actually settles them.  This releases working capital for growing businesses.

Do you offer full invoice factoring or debt factoring service?

No. We don’t offer a full invoice factoring service.  Full invoice factoring would usually involve a lender taking complete control of your invoices, your credit control and your cash flow.   At Creative Capital we provide selective invoice finance which is flexible cash flow finance allowing you to raise funds against individual invoices as and when needed.

What is spot finance and single invoice discounting?

Selective invoice finance is also known as spot factoring and single invoice discounting in the UK.  They all describe the process of being able to raise cash flow finance against individual invoices.

Is invoice finance new?

No. Invoice Discounting and Invoice Factoring have been around for many years, they are considered to be mature financial services which are rapidly growing in popularity. It is a common and widely used form of short term funding used by many small businesses.   Selective Invoice Finance gives business owners a flexible, short term cashflow solution.

What is the difference between Selective Invoice Finance and Factoring?

Traditionally when entering into a full book factoring arrangement you sell your entire sales ledger to a factoring company, who will provide finance against this. The factoring company will take over all the credit control and debt collection.  There may be several different charges to consider including Set up fees, Administration fees and Interest fees. Factoring facilities will also tie you into a long term contract, which can be for as long as 18 month to 2 years and which includes a notice period.

With Selective Invoice Finance from Creative Capital, you only finance the invoices you want to finance, when you want to finance them. You do not pay set up fees, you are not tied into a contract, and you look after the credit control and debt collection, allowing you to maintain your relationships with your key customers.

Does Creative Capital give business loans?

Yes. Creative Capital offer a short term cash flow loan which is aimed at cash generative businesses.  They can also help businesses which raise a large volume of smaller invoices and so are not suitable for Selective Invoice Finance.  You can out more about these here

What security do I need to give?

Unlike many other lenders, we do not ask for a charge on your house, and we do not usually require a debenture either. We do ask our clients to give a personal guarantee when they take on a Selective Invoice Finance facility with us.

Will my customer’s be aware of Creative Capital’s involvement?

Our Selective Invoice Finance service is always on a fully disclosed basis whereby the customer is notified of the transaction. The customer is requested to confirm receipt of our notification as well as acknowledgement of the receipt of the goods or services. The customer is also required to acknowledge that there are no disputes or warranties with the invoice and that they will pay the invoice directly to Creative Capital.

If I have selective invoice finance, can I still borrow from other sources?

Yes. Creative Capital’s Invoice Finance service does not impact or interfere with any current or future planned borrowing arrangements as we are buying an invoice and not lending funds. We can easily sit alongside other lenders.

Does Selective Invoice Finance lock me into a contract?

No. There are no minimum contractual terms or agreements. You can use this service as and when you need to. You are free to choose what’s best for you and the cashflow needs of your business

What are the set up costs for selective invoice finance?

Unlike many other invoice finance facilities, we do not have any set up costs. Our Selective Invoice Finance facilities have only one fee associated with them, and that’s the daily interest rate we charge you when you finance through us.

Can I insure my debts?

We do also carry a credit insurance facility which can be accessed by all of our clients. If you would like to take advantage of this service, simply let us now, and we’ll do the rest.

How do we find out if we can use selective invoice finance?

Telephone our friendly team for an ‘in principal’ same day answer telephone 01244 561343 or email info@creativecapitaluk.com  – we work hard to provide you with the answers you need as quickly as possible.



CREATIVE BUSINESS FINANCE

How much working capital can you provide using stock or trade finance?

Typically Creative Trade Finance arrange supply chain finance which includes trade and stock finance within the range of £25,000 to £300,000.

What is Trade Finance?

Trade finance helps solve supply chain cashflow problems.  It can be particularly difficult for small business owners to obtain the required level of funding to buy stocks and support business growth.  Creative Trade Finance provides an alternative to traditional bank finance, trade finance frees up your cashflow.  In simple terms, we provide the cash you need to help you purchase stock in the UK, Europe or globally.  Within your expanding business your customers are ready to buy your stock, you have purchase orders in place and will be raising an invoice to your customer upon delivery, you lack the working capital required to buy the stock.  Up to 100% of landed cost price is available. Contact us to find out how we can finance your supply chain.

Can you provide finance for stock without firm purchase orders?

Yes, we may be able to help you even when you don’t have purchase orders in place. We understand that, in today’s competitive commercial world, you may have to speculate to accumulate.  You may not have firm purchase orders. Stock Finance provides working capital which enables you to purchase stock from the UK or globally.  Creative Trade Finance provide up to 100% of the lander cost and buy stock for your business.  A rolling facility will be put in place which solves your short term or mid term cashflow problem.

Do you provide funding to businesses to buy liquidation stock?

Yes. We can provide liquidation stock funding to support Administrators and Insolvency Practitioners. Creative Trade Finance can provide funding for the purchase of liquidated stock. When a company is placed in Administration, stock may have a retained value and the administrator will want to sell the stock. If you have an opportunity to purchase liquidation stock and need funding contact us to discuss the details.

What is an Asset Finance Bridge?

An Asset Finance Bridge can help you buy a piece of machinery or make a significant capital investment in an asset for which a lease is not immediately available.   This solves a funding dilemma for business owners.  You may need to import an asset such as machinery, once in the UK you are able to use HP or a lease but you lack the cash to get the asset into the UK.  Creative Trade Finance can bridge the gap with an asset finance bridge.

Can I use both Invoice Finance and Trade Finance for business funding?

Yes.  At Creative Trade Finance we have an end to end stock funding solution.  You can use our trade finance for working capital which helps you buy stock, you can then use our selective invoice finance to release cash once you raise your invoice to your customer.  This is an end to end solution which funds the complete supply chain cycle.

Who retains title to the goods?

Creative Trade Finance will retain title to the goods, until settlement/payment has been received, thus releasing the stock/title in tranches as it is required.  Please feel free to discuss how this has worked beneficially for other customers.How do we find out more about Trade Finance, Stock Finance and the Working Capital for business provided by Creative Capital?



CREATIVE BAD DEBT PROTECTION

What is Bad Debt Protection?

Also known as credit insurance, it protects you against your customer going bust, or simply not paying when they should have done. It covers against all insolvent events, as well as protracted default.

Why Do I Need Bad Debt Protection?

There is always a risk of a debtor going bust. As we saw during the last financial crisis, companies of all sizes can go bust, and these can be the most catastrophic. By insuring our debts, we give you the additional peace of mind that should the worst case scenario happen, we will be able to make a claim on your behalf, putting cash back into your business, and further helping to manage your cash flow.

How Is This Different From Credit Checking?

Firstly, credit checking only gives you an opinion of a debtors’ financial strength. If your credit checking facility gets this wrong, there is no recourse back to them. A Credit Insurance company will actually put their money where their mouth is. If they get it wrong and the debtor goes bust whilst you are owed money, they will pay a claim to you. A Credit Insurance company will often have access to more up to date information. They often underwrite based on management accounts supplied to them by debtors, as well as with payment information fed to them by other clients.

Is There a Set Up Fee?

No. We simply charge you a blended rate for our Bad Debt Protection and cost of borrowing. As with our non-insured Selective Invoice Finance, we charge a fixed rate which is simple to calculate and budget for.

Am I Tied Into A Contract?

No. As with our Selective Invoice Finance, you only use this as and when you need to. You only pay to insure a debt which is financed by us.

Is Protracted Default Covered?

Yes it is. In order to make sure this is covered, we do have to report seriously overdue debts to our insurance company. Once this has been done, we will then cease to fund against that debtor. This is built into our overall credit control process which we can discuss with you at any time.

Can I Insure My Whole Ledger?

Our Bad debt Protection only insures the debts financed by us. If you want to insure your entire ledger, then we would suggest you talk to our partners at Bluefin.

Who Underwrites Creative Capital’s Facility?

Our facility is underwritten by Euler Hermes UK, via Bluefin Insurance Services.



ASSET FINANCE BRIDGING

Do I need to have a Hire Purchase or Lease agreement in place before I use your facility?

In order to provide the finance required to purchase the new plant or machinery for you, we must have sight of a contract between you and the end financier. This is essential to ensure we have an exit route, and also to make sure the fees being charged to you won’t be prohibitive.

What is the maximum amount of time I can borrow the money for?

As always, we will try and remain as flexible as we can, and we will consider each individual deal on its own merits. The general rule of thumb is that we will fund a transaction up to 90 days, although the preference would be for up to 60 days.

What security is required?

We will require an unsupported personal guarantee from all directors/shareholders, as well as a debenture against your company. If you are already working with another funder e.g. an invoice finance provider, then we will be happy to liaise with them to agree appropriate priorities between the respective debentures.

How much can I borrow?

We will be happy to consider Asset Bridge Finance to help with purchases ranging between £25,000 and £200,000 per transaction – we will have to restrict our finance to the amount of the independent valuation we would request for any given asset.

What documents do I need to provide before you can provide Asset Bridging Finance?

We will need to see evidence that the hire purchase or lease finance is in place together with an invoice from the supplier in our name – we would also seek an independent valuation on the asset being purchased and would want an undertaking from the hire purchase or lease provider to send their finance proceeds directly to us once the finance is drawn.

What types of assets can be financed?

We can consider providing finance against any type of plant or machinery, as long as it is being financed by a hire purchase or leasing company once it is on site.

Find out more about Asset Finance Bridging



TRADE FINANCE

What Security Do Creative Capital Need?

A Trade Finance Facility is secured with a debenture which gives Creative Capital title over stock. The goods are also bought in our name. As with all of our facilities, we also require an unsupported, fully covering personal  guarantee from all directors and major shareholders.

Do I Need My Own Insurance Policy?

Yes – you should maintain your current product liability, freight, warehouse and any other relevant insurance policies. However, Creative Capital must be noted on them as an interested party. This is something your insurance broker can easily arrange on your behalf.

Do I Need To Have Trading History?

Yes. You should have at least 6 months experience with your suppliers, and ideally should have sold to your end customers in the past as well. You should also have robust quality control measures in place.

Who negotiates With Suppliers?

You continue to negotiate with your suppliers as normal. The only difference is that the final purchase order should be made out to Creative Capital as we pay for the goods, and own the goods.

How Are Creative Capital Repaid?

Trade Finance facilities are repaid in a number of ways. Creative Capital will typically take assignment over the final invoice, which your customer pays direct to us. The residual balance is then paid to you. In order to accelerate this process, we will normally use our Selective Invoice Finance Facility (please insert link to SIF page) which means we are repaid more quickly, and you can use your facility again. If you require a full factoring or invoice discounting facility, then we can work with a range of lenders to facilitate this, and will happily recommend people.

How Long Can I Borrow For?

Typically, we allow funds to be outstanding for up to 120 days. This period will cover deposit payments (if any have been paid by Creative Capital), manufacturing, shipping and final delivery of the goods.

How Much Can I Borrow?

Our Trade Finance facilities start at £25,000, but can be as large as £200,000 for new clients. We can consider going above this level for clients who have established a good quality trading relationship with us, and will review facilities as required, against your track record with us.

How Often Can I Use My Trade Finance Facility?

You can use the facility as little or as often as you want. We will set a facility limit, and as long as you are trading within this limit, you are free to draw down when required, subject to any committed future payments.

Do I Need to Contribute?

Ideally, you will contribute towards the deal, typically by paying towards any deposit payments to suppliers. Asking you to have some ‘skin in the game’ is a way of sharing the risk and showing your commitment to the transaction. This will also help to keep your funding costs down.

What Does Trade Finance Do?

Trade Finance allows you to bring pre-sold goods into the UK, allowing you to fulfil larger orders which would normally be out of your reach. We buy the goods on your behalf, meaning order placement isn’t restricted by your cash flow. We can finance up to 100% of the landed cost of goods i.e. deposit, balance, VAT, duty and freight.




STOCK FINANCE

How often can I use my Stock Finance facility?

You are free to use the facility as little or as often as you need to, as long as you are trading within the agreed facility limit.

What security do Creative Capital need?

A stock finance facility is secured through the means of a debenture which give Creative Capital title over the stock owned by our client, as well as unsupported personal guarantees from all company directors.

How much can I borrow?

Creative Capital will look providing Stock Finance facilities of typically £25,000 to £250,000. Larger facilities can be considered, depending on the deal.

Who retains title to the goods?

The stock remains the property of Creative Trade Finance Ltd until such time as we have been repaid in full. At least point, the remaining stock is handed over to our client.