Recent surveys have suggested that there are growing concerns amongst UK SMEs over the increasing trend in late payments.
After further research conducted by a leading credit information company highlighted that businesses were now taking over two months to pay their bills (on average), which was an increase of nearly two days since 2006. It appears the problem is getting worse and that late invoice payment is a deeply-embedded trait of UK business culture.
Many commercial finance providers are urging SMEs affected by late payments to look to Factoring to release cash tied up in pending payments. Factoring is a flexible type of business loan which allows a business access to cash as it issues new invoices. A Commercial Mortgages specialist or factoring company will lend a certain percentage of the value of that invoice (normally up to 85%). It will then collect the invoice which when becomes due, gets paid back to the issuing company. The commercial mortgage specialist or factoring company will then charge a small percentage of the value of the invoice, and interest (of course) on the borrowed money.
In many cases, the release of cash from tied up invoices allows businesses to pay suppliers sooner and negotiate further discounts on this basis. Michael Thommes, MD of large Commercial Mortgages provider General Finance Centre, also points out that �many companies prefer to use a factoring or invoice discounting facility over an overdraft, as the advance can be comfortably increased in line with your business� successful development�.
Visit General Financecash_flow_finance.htm to find out more on how to release cash from your business� invoices.
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I write for and behalf of General Finance Centre This article is free for republishing
Source: http://www.articlealley.com/article_210209_19.html
Keywords: business culture, business invoices, business loan
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