Jan
26

Invoice Factoring: Not Just for the Big Fish

Invoice factoring, contracting to accept less than full face value for invoices in return for immediate payment, is mistakenly thought to be an option open only to large companies. True, some businesses are too small for consideration by factoring companies, but many that were formally deemed to small are now considered perfect candidates. Usually, companies that sell to other businesses are prime candidates and many service industries and e-commerce companies find invoice factoring particularly beneficial.

Companies with primary assets that are the monies owed them have particular difficulty obtaining loans, however, with invoice finance the invoices serve as collateral. The lender, or factor, takes charge of the invoices and assumes responsibility for any actions necessary to secure payment. The client company’s customers pay the lender and any receipts, above the factor’s agreed fee and the upfront payment, are sent to the company.

Regarding the factoring contract, there is a limited time period for collection. If an invoice is not paid within the prescribed time, generally 90 days past due date or 120 days from invoice date, the invoice reverts to the client company.  However, assuming a non-recourse fee has been paid the company will not have to make repayment.

Jan
24

Forex – An Overview

It is difficult to think of a faster-paced, more profitable, faster-growing global market than Forex.  Forex, also known as Foreign Exchange, involves the trading of one currency for another and speculating on market trends in order to sell the currency at the right time, thereby maximising profit.

Forex is usually done through a broker or market maker.  Traders choose a pair of currencies and place trades through their broker or market maker, who will then pass the order to the Interbank Market.  When the trader decides to close, the broker sells the currency and any profit is credited to the trader’s account.

To begin trading in Forex, an individual needs to open a trading account with a brokerage company, and download a trading platform.  All trading platforms offer different functionality for different prices, so it is important to shop around.  An example of a good trading platform is CitiFX.  Reviews of many different platforms can be found online, so it is a good idea to obtain plenty of information before committing to one platform.

The most important thing to remember when trading Forex is not to invest money that you cannot afford to lose.  Although significant profits can be made, so can significant losses and it is important therefore to mitigate your losses by not investing all your capital in one deal.  This way, if it goes wrong and you lose money, you will still have capital left to try again.  Many platforms offer users the chance to practice using a Demo Account first so that they do not have to invest any money but can still practice and build their confidence.

Jan
22

International Invoice Factoring

Typically, options for invoice finance, such as factoring and invoice discounting, are often considered by businesses trading within the United Kingdom; however, there are some factoring companies that also offer the opportunity for ‘export factoring’, the financing of goods or services that are sold overseas.  In terms of the process and credit limits, local and international factoring are generally the same, although factors may offer a lower percentage rate on invoices for international sales than they do for domestic sales.

Basic Requirements

Normally, companies must have a minimum turnover of £100,000 and this can include the value of UK sales.  Within the European Union (EU), businesses are able to factor amounts owed from other parts of the EU, even if these are relatively small.  Outside the EU, businesses will need more substantial sales per country and for the USA; for example, annual sales of at least £500,000 are often required.

How it Works

In the UK, a lender or factor will normally be directly involved in arranging invoice finance with a business.  Export factoring, however, usually requires a further partnership and the lender works with a local agent who will take on the responsibility for collecting payments in the country to which the business is exporting.  This mechanism serves to help prevent any difficulties that might arise as a result of, for example, time or language differences or variations in laws and customs.  It is often possible for businesses to invoice in one specific currency and choose to be paid in another.

Jan
21

Insurance for Landlords

The type of landlord insurance you require will depend to some extent upon the type of tenant you are accommodating in your property.  Student lets will most certainly require a different type of cover than would a let to a professional.  Short-term (3 or 6-month lease) will require different cover from long-standing tenants who may have been with you for many years. 

In a nutshell, insurance for landlords can be as individual as you are and as a responsible property owner you will of course wish to ensure your policy has all the provisos required.  However, the majority of the expense will be used to provide cover for the building and its structures.  The policy does not need to cover the tenants’ personal possessions.

Landlord insurance can be as extensive as you require and, especially if this is your first buy-to-let experience, you should make a list of your essential requirements and make sure they are included in your policy.  Insurance providers can also offer a multiple policy if more than one property is being let.

Jan
20

How to Claim Against a Travel Insurance Policy

When the unthinkable happens on holiday it is always a good idea to make sure you are protected with an insurance policy. Insurance policies are designed to cover the loss or theft of items and also for medical expenses should an injury occur while away from home.

In some cases the insurance company insist on an official report as to what has happened to an item or items that have been lost or stolen. In the cases of theft this could be a police report, so if the traveller notices the item missing while still abroad, making contact with the local police department to report the incident is the best way to start. The loss of an item should be reported to the holiday rep, if appropriate and for cases of injury, medical reports will be required.

A claim can be made directly with the travel insurance company, simply by making a phone call. They will advise on what paperwork will be required, depending on the individual claim being made. Simple claims are often paid out within a few weeks, but in the case of more complicated problems or those where on-going medical expenses are involved, the process is likely to take much longer.

Jan
18

Touch Financial Factoring Broker

Touch Financial Factoring is the biggest independent factoring broker in the United Kingdom and the company has access to more than 20 lending institutions.

What are the benefits of using the services of a company such as Touch Financial Factoring over approaching a bank, for example or directly approaching an invoice factoring company?

In fact, the benefits are numerous. In the first place Touch has excellent business relations with a large number of credit providers and can arrange for you to deal with one that is ideal for your specific industry or requirement. The company can, in most cases, also arrange more favourable terms than you would be able to agree on your own.

You must operate a UK business and your customers need to be other companies, not private individuals. Your yearly turnover should be at least £50,000 and your customers should pay in not less than 30 days and not more than 90 days.

It is possible to obtain a quote without committing yourself in any way, so you can easily compare a range of offers.

Jan
16

Start Trading on the Forex Market

In the past, the foreign exchange market was only open to national banks or multinational businesses, but in the 1980s changes occurred that enabled individuals and smaller businesses to begin participating, using margin accounts.  These accounts have allowed the market to flourish and gain popularity as a sound investment opportunity.  Nevertheless, investing in Forex is by no means simple; those who wish to invest need to undergo a particularly comprehensive education process, which is essential in order to ensure that they make wise investment decisions and avoid costly mistakes.  Undertaking some thorough research before making a move into the market is always a wise decision.  It is vital that as a new trader you familiarise yourself with the market and use a demo account to undertake practice transactions before you enter the real-time foreign exchange market.

Brokers & Accounts

Traders in the Forex market usually require a broker to handle transactions, so it is important to choose one carefully and ensure that they are properly registered.  When you are searching for a broker to handle your Forex transactions, check whether they are registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CTFC).  Forex accounts can be opened quite easily by filling out a form and providing appropriate identification.  The application process will also include a margin agreement, which states that a broker can intervene if they believe any trade presents too much of a risk.  This process is necessary to protect the broker’s interests, but once the account has been set up, you can fund it and begin trading in the Forex market.

Jan
15

Buying Life Insurance Online

Buying life insurance online can be just as easy as it sounds. There are so many insurance companies competing in the market it is easier to sit and search for them than it is to phone them all. Online there are also several price comparison websites that can be used to quickly see which provider is offering the best deals, without the need to visit all the individual sites in turn.

If the potential policyholder knows exactly how much cover they want and the terms of the policy, then they can proceed online without problems. The paperwork will be sent to them to sign and they will be covered immediately. However, those who are unsure as to what they require may be best advised to contact the company offering the best deal, and speak to an advisor before committing to a policy.

Taking into consideration household finances, any dependent children and ‘hidden’ costs, such as funeral expenses and solicitor’s bills, should all be factors when deciding on the policy terms required.

Jan
14

Which Invoice Finance Solution Is Best For You

When you choose to use invoice financing to increase immediate cash flow in your company, you have two options to choose from.  It is important to choose the right invoice finance solution for your business’s needs, as the two are different.  Your options include invoice factoring and invoice discounting.  While similar, they are each available to different types of businesses.     

Invoice Discounting

The invoice finance solution, invoice discounting, is available to businesses with an annual turnover of at least £500,000.  Some discounters require almost twice that much.  Invoice discounting allows you to maintain control over your sales ledger and can be kept confidential, meaning your customers never know.  This is best for companies with their own in house credit management team. 

Discounting allows you to borrow a set percentage against outstanding invoices.  You pay down the borrowed amount when the customer pays you.  In the interim, you pay interest as with business loans.  Once paid, you receive the full amount of the invoice minus the discounter’s service fee.

Invoice Factoring

Invoice factoring only requires an annual turnover of £50,000.  This makes it a more popular solution as it fits with most sizes of business.  Some factors will actually accept businesses with less turnover if they meet other requirements.  Factoring does provide the option to have debt collection handled by the factor instead of you.  If the factor collects debt, customers must be made aware of this, since the factor contacts them.  You only pay a set percentage of the invoice as the factor’s fee.

Jan
12

Buildings Insurance Cover

Home insurance is also referred to as house insurance, homeowners insurance and even hazard insurance.  Whatever it is called, home insurance is a type of personal insurance, which offers financial protection for the policyholder against a varied list of incidents that may occur in and around their home.  A buildings insurance with accidental cover policy usually covers basic damage to the home, such as fire and vandalism, along with fixtures and fittings within the home against damage or total loss.  In addition, many basic home insurance policies cover the expense of having to live somewhere else if damage occurs to the property that renders it uninhabitable for a period of time.

For many homeowners across the United Kingdom, the basic cover an insurance provider offers is not enough for absolute peace of mind.  For example, some insurance companies do not pay out for damage caused to property as a result of flooding.  This can frequently be purchased as an optional extra, something particularly recommended for those who live in an area that is liable to flooding.  Unfortunately, if this is the case, the excess that would be required in the event of a claim will be significant.

Building insurance is designed to cover the cost of totally rebuilding the property.  In order to gain a mortgage in the UK, the homeowner usually has to have buildings insurance cover.  This is because the company that lends the money needs to be sure that their investment is as secure as it can possibly be.  Buildings insurance does not cover the cost of purchasing the property.  This is because the rebuild cost is considerably less than the purchase price of an already existing property.

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