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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Is your business making your you feel sick or do you even hate your business?

The chances are that if you are a Director or a Shareholder of a Company, big or small, you may be answering yes to these questions now or at some point in the future.

I feel confident enough to say that this is true in almost 80% of cases at some point of a business lifecycle. Why do I feel confident it so high, well I’ll tell you… Running a business can be at times a very lonely experience.

Often you are at the top of the decision making process and there is no one for your to turn to. You are juggling the roles of Shareholder, Managing Director, sales, production and accounts.

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You probably wrote a business plan when you first started but you can barely remember what was in it never mind where you filed it.

The fact is as business owners we get bogged down by the business itself, the day to day of it all.

As a business adviser working with many client’s large and small one of the first I work on is getting the owners to step back and look in at their business. “Don’t work in the business work on the business”

If you are feeling stressed about your business or annoyed that you haven’t fulfilled your business potential I strongly encourage you to read this book… In fact if you are a business owner and only every read one book on business it needs to be this one. E-myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It

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Growth & Support For SME’s On The Agenda At The House of Lords

It was great to receive a letter from Adam Tyler the Chief Executive of our Trade Body, The National Association of Commercial Finance Brokers  (NACFB) yesterday. Now it has to be said I have, in the past not been a massive fan of the dozens of trade bodies that appear on the scene with some tenuous link for their own existence and self importance.

However, a good and well organised Trade Body is a fantastic thing, especially when it delivers real benefit to its members and possibly more importantly adds value to the customers (that’s YOU) of its members.

The Following letter, that I have just lifted out, is great demonstration of what they do for the Small to Medium Sized Business here in the UK. Enable Corporate Strategies Ltd. are proud to be members of the NACFB.

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Dear Phillip

I attended a breakfast briefing yesterday at the House of Commons followed by a Senate Meeting of The Genesis Initiative in the House of Lords. During these meetings there was an opportunity for me to be able to comment on the work of the NACFB and the amount of business our members introduce to our Patrons. It was also a great opportunity to highlight the fact that we have 62 different commercial funders as part of the NACFB. This then opened up into a discussion on how the 113 Trade Bodies of this Initiative representing nearly 1 million SME members could benefit from knowing more about how to access these funders through our brokers.

The early breakfast meeting attended by Lord Risby as well as a smattering of MP’s gave me the opportunity to hear about the current government proposals and the other issues faced by SME trade bodies. The meeting at The House of Lords was where I had the opportunity to comment on the NACFB and it was quite poignant that the announcement was read out about the new BBA website covering the five High street Lenders just after I had commented on the fact that our Association members had access to over sixty commercial lenders and funders. Once again the amount of business that we introduce across the membership is always well received and proved our significant part in funding the SME community. This is another step forward in lobbying for more funding on behalf of you as members as well as your business customers and of course creating more opportunity for you from other trade bodies.

We will now be pursuing this opportunity and trying to add to the fantastic work the Genesis Initiative has been undertaking since 1999.

The Genesis Initiative was formed to improve the quality of the debate on SMEs in the UK and Europe and create economic reform, driven by SMEs and supported by Parliamentarians

The objectives of the Genesis Initiative are to encourage the creation and growth of SMEs and to support them through research, the writing of policy papers and acting as an advocate for their common interest. This complements and strengthens the efforts of established representative SME organisations. Genesis acts as a co-ordinating body, bringing together Entrepreneurs, SME Academics, SME Representative Organisations, with All Party Support from over 500 Politicians from the House of Lords and Commons, and also the Welsh Assembly. Genesis supplies policy papers from its Senate for onward transmission to Government and interested parties. Conferences, seminars and other meetings, often on a regional basis, are held to harness the collective views of the SME community and channel their vision, ethos and culture towards policy-makers/legislators.

The Genesis model has been enthusiastically supported within the European Union and a Pan-European Genesis Initiative was set up in 2001 to engage all participants within the SME family irrespective of nationality, race, creed or political affiliation.

Warm Regards

Adam Tyler
Chief Executive
NACFB

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Budget 2011 – Key Points For Business

The Chancellor’s key business announcements include the following:

Corporation tax to be reduced by 2% in April 2011 rather than 1% as previously planned, promoting high levels of business investment and helping the UK maintain the lowest rate in the G7. By 2014, the rate will be reduced to 23%. No new regulation on firms with fewer than 10 staff for three years. 43 different tax reliefs to be abolished as part of simplification of tax code. Introduce a moratorium exempting micro-businesses and start-ups from new domestic regulations for three years from 1 April 2011. Reducing the burden of regulation for businesses, including dropping proposals for specific regulations which would have cost business over £350 million a year. New rules to require planners to prioritise growth and jobs. Continued commitment to the Green Investment Bank (GIB), including an initial capitalisation of £3 billion and it becoming operational in 2012-13, a year earlier than previously expected. Reform of the Enterprise Investment Scheme (EIS) and Venture Capital Trusts, including raising the rate of EIS income tax relief to 30% from April 2011, subject to State Aid approval. Business rate relief holiday for small firms extended for another year from 1 October 2011. Doubling the lifetime limit for Entrepreneurs Relief to £10 million. Increasing the SME rate of R&D tax credit to 200% from April 2011 and 225% from April 2012. 21 ‘Enterprise Zones’ to be created across England, with simplified planning rules, superfast broadband and tax breaks for businesses.   Implementing the proposals of Lord Young’s review of Health and Safety. Consultation in 2011 on the options for integrating the operation of income tax and National Insurance Contributions (NICs). £180 million package for 50,000 additional apprenticeships, and an additional 80,000 work placements for young people.Launch of a public thematic review to reduce the stock of regulation. On 24 March 2011, the Government will publish a consultation paper on rebalancing the Northern Ireland economy, including looking at mechanisms for devolving the rate of corporation tax to Northern Ireland.

Alongside the Budget, the Coalition Government also published The Plan for Growth outlining a package of four over-arching measures to support private sector investment, enterprise and innovation in order to create the right conditions for private sector-led recovery and sustainable economic growth. For more information from our business advice team please follow the link.

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