Is now the time to refinance?

With the economy 'growing' and a competitive lending sector, stimulated by the growth of alternative lending, is now be the opportune moment to refinance business facilities increase the bottom line.

A timely review of finance facilities can be as important as reviewing your marketing plan, HR policies, or procurement procedures.

With the growth of alternative finance, the market has become competitive with many products and services available.

Options include

1. Factoring,

2. Invoice Discounting,

3. Asset Based Lending, or

4. Crowd Funding.

Sources of finance include

1. Traditional Institutions,

2. Crowd Funding Platforms, or

3. Alternative funding providers.

With such a competitive market, refinancing a historic agreement(s) could lead to significant savings and greater liquidity.

Traditional finance arrangements for SMEs have been delivered as overdrafts and/or loans, where a level of funding is draw down or used as extended working capital.

Historically alternatives such as 'factoring' have been stigmatised as a sign of poor financial strength and failing management aka an action of last resort.

This perception, despite being still in the public domain, is now being altered by the growth of alternative finance. There are many options such as:

• Factoring is one such an alternative and should be considered as a viable option particularly with the variety of products available.

• Bespoke invoice discounting where advances of 50-80 per cent of trade debtors can be achieved, but control of debt remains internal.

• Single invoice finance where a large contract is won, such invoices can be financed individually.

• Complete factoring solution where control of your debtors is passed completely to a finance provider.

The fear and stigma of such arrangements needs to be removed.

Most businesses are comfortable with asset finance and have used such a facility numerous times.

An invoice is classified as a current asset hence invoice finance is simply a niche area of asset finance.