Invoice Factoring Is A Credible Bank Overdraft Alternative

Invoice factoring – which is from the stable of invoice finance products show further growth across the European Union with total turnover for the industry in 2010 being €986bn representing an increase of over 17% when compared to the 2009 figures.

This robust growth has taken place in a general environment of low economic growth (only 1.8% across the EU 27) and demonstrates the importance of the factoring and commercial finance industry in funding and supporting the development of business, both domestic and international.

Admittedly this growth is against the back drop of Banks have less appetite for their traditional bank lending facilities such as overdrafts. However, this reluctance to lend is requiring Business Owners to look at the alternatives and furthermore Directors are seeing that invoice finance is a very credible alternative.

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An Invoice Factoring facility could be an ideal funding solution for any business that sells products or services to another trading business.

Fund Sales Invoices up to 90%. Track Sales – your funding grows inline with your sales growth. Flexible Facility – draw down as and when you need the additional working capital.Similar Interest Rate Costs to an overdraft. Available to New Start Businesses. Flexible Terms – No extended tie in contracts.

If you are interested in a Risk Free invoice finance quote click here.

The above Research: Five countries made up 80% of the total EU market share: United Kingdom, France, Italy, Germany and Spain. The level of factoring penetration in terms of GDP increased from 6.5% to 8.0%

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Company Voluntary Arrangement agreed for JJB

For the second time creditors have voted in favour of a company voluntary arrangement, CVA, for sports retailer JJB.

A company voluntary arrangement is a legally binding agreement between a Company and its creditors, supervised by and insolvency practitioner. 

The CVA terms will see the closure of some stores and all tenants within the JJB property portfolio will move to monthly rent payments for the next two years.

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Some 43 stores, two of which are not trading, will close on or before 24 April 2012. The CVA will also allow JJB to review the performance of a further 46 stores and enable closure of them on or before 24 April 2013, if the performance cannot be improved.

What is a Company Voluntary Arrangement?

A CVA is based on preserving the company, rebuilding sales and profits and paying something back over a period of time to be agreed. Directors remain in control, personal guarantees don’t get called in (usually) and it gives your business a fighting chance to survive.

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HMRC Time To Pay – Arrangements Refused

The percentage of Time to Pay requests refused by HM Revenue & Customs (HMRC) in 2010 was more than double the rate in 2009, according to new statistics.

Figures from HMRC show that the percentage of requests refused in 2009 stood at 2.7 per cent. In 2010, the refusal rate had risen to 5.8 per cent.

Time to Pay (TTP) was launched as part of HMRC’s Business Payment Support Service (BPSS) in November 2008 to help businesses and individuals seeking extra time to pay tax they owed. Since its launch, a total of 16,100 Time to Pay arrangements, worth £890 million, have been refused.

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Despite speculation that HMRC has toughened its criteria for making Time to Pay arrangements, its website says: “There are no plans to close the BPSS or change HMRC’s TTP policy or approach.”

HMRC also says that requests that are initially refused may, after a period of time, be revised and resubmitted and an arrangement granted.

The new figures also revealed that since the launch of BPSS, 395,400 arrangements have been agreed, worth £6.83 billion. Of these, 46 per cent involved VAT, which also accounted for 50 per cent of the value of arrangements.

If your Time To Pay Arrangement is failing or has just been refused why not speak to one of our advisors who could come up with a Company rescue plan. Click here to request a call back or carry on the debate below by leaving your comments.

Useful Info on the TTP scheme here at HMRC website.

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Business Bankruptcy Figures Down Hide Pressure In Retail Sector

The latest Insolvency Index from Experian has reported a year-on-year improvement in business bankruptcy during February.

The total number of insolvencies fell by 12.5% during February compared to the same month last year – from 1,834 in February 2010 to 1,605 in February 2011 – bringing the rate of insolvencies down from 0.10% to 0.08%.

The overall financial strength score of UK businesses continued to improve, from 81.18 in February 2010 to 81.60 in February this year. The score also saw a small month-on-month improvement from 81.49 in January.

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Scotland saw the greatest improvement with the lowest insolvency rate at 0.06% in February, while Wales saw the biggest increase to the rate of insolvencies rising to 0.11% from 0.08% in February 2010.

Yorkshire was the worst performing region with a rate of 0.13%, while Greater London continued to be the region where businesses had the lowest financial strength score at 80.51.

These Figures Conflict With Retailers Under Pressure Form Insolvency

However, last month saw a disturbing jump in the number of retail companies at high risk of going under, according to a report by RSM Tenon. The number of companies deemed to be at high risk of insolvency jumped by 4% in March compared to the month before, and jumped 2% compared to this time last year. The increase was the second in two months, reversing the positive trend that lasted nearly a year, bringing worrying news for the UK retail sector.

The news follows the announcement by the British Retail Consortium which reported its worst fall in sales since records began in 1996 with a drop of 1.9% in March compared to the same period last year.

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HMRC Time To Pay Arrangements – take action now

HMRC has confirmed through the Budget announcements that the time to pay scheme will remain available and that the Business Payment Support Service will remain in place to advise viable businesses experiencing temporary financial difficulty. However, the message is clear for those businesses wishing to return time and again to the arrangements.

This help is not an arrangement to delay the payment of tax on an ongoing basis – it is targeted at those in temporary difficulty, so advisers with clients revisiting the time to pay arrangements may find that HMRC is less than sympathetic. Businesses will need to consider refinancing options, looking at a wider menu of funding options in which to provide ongoing working capital if they are unable to meet tax liabilities as
they fall due.

IMPORTANT – If your business is struggling to meet existing time to pay arrangements it important that you speak with one of our advisors today wherein we can come up with a plan.

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Invoice Discounting Is It The New Overdraft?

Traditionally business owners have turned to their bank manager when proposed expansion or investment has meant that they require additional funding for their business.  The bank manager has normally responded by granting an overdraft facility or agreeing a medium term loan.

However the major high street bank are looking to shore up their severely weakened balance sheets and part of this process has meant a reluctance to lend (particularly to cash-strapped owner-managed businesses) and a significant hiking in their fees and charges in the process.

The benefits of Invoice Discounting compared to an overdraft facility are clear:

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More generous funding criteria – up to 90% of outstanding debtor balances.Less personal security – whereas overdraft is often secured against personal property Invoice Discounting require little or no personal security.Equivalent or even lower charges – with bank interest rates rocketing, Invoice Discounting now looks very attractive in comparison.Less negotiation – rather than constant and protracted negotiations to increase limits the Invoice Discounting facility grows with the business’s working capital requirements.

These facilities are completely confidential and easy to manage.

One perceived downside of these facilities was the fact that the client was tied in to a long term contract, but for the right clients, EnableFinance.com can arrange an invoice discounting facility on a rolling monthly basis, so if you don’t like it you can leave within 30 days

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Company Voluntary Arrangement (CVA) For Oddbins

Lee Anthony Manning and Matthew David Smith were appointed Joint Nominees for the proposed Company Voluntary Arrangements of Oddbins Limited and Oddbins Properties Limited, together “the Companies” on 15 March 2011. The affairs, business and property of the Companies continue to be managed by the directors of the Companies.

Initial forecasts had speculated that creditors would be set to receive 13 pence in the pound.  However, Oddbins creditors face receiving just 7.5 pence in the pound should the Company Voluntary Arrangement not be accepted at tomorrow’s creditors meeting in London, after forecasts for payouts should the retailer enter administration were downgraded.

If the CVA is rejected on the Thursday 31 March the company will placed into administration at a court hearing on 4 April.

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The Company Voluntary Arrangement is part of a restructuring process for the off-licence chain. About 15 head office staff out of 60 will lose their jobs. A third of Oddbins’ stores are to be sold off, while the landlords of the remaining 89 stores will be asked to accept lower rents. WineShak and Corks Out are thought to be potentially interested in acquiring some of the shops.

It really is tough times for the retail off licence industry. Which is  under the spotlight yet again this week as it was announced Britain’s oldest off licence – Bakers Wine Merchants in Bishop’s Waltham, Hampshire, has been forced to close.

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