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A commercial mortgage agreement will typically consist of a number of different fees and associated costs. Naturally, the level of these fees will vary depending on your lender and the repayment options you choose. However the type of fees and costs associated with a commercial mortgage remain much the same, as outlined below:

A commercial mortgage is a significant investment for any business. That’s why we believe in making sure our customers fully understand the potential advantages and disadvantages before they enter into any agreement with a lender.

Our experienced consultants have pulled together a list of potential pitfalls, so familiarise yourself with these and bear them in mind whilst considering a commercial mortgage:

Minimum level for the loan
This is the minimum threshold or amount a commercial mortgage will lend to you. Commercial mortgages are not typically available for loans of less than £20,0000, where alternative funding solutions, for example a personal loan, may be more affordable.

Period of grace
Under certain circumstances some lenders may be flexible regarding late or delayed repayments. It may be possible to negotiate with your lender a payment holiday or lower repayments for an agreed period.

Personal guarantee

Invoice Factoring is a way of giving your business the funding needed to trade, based on your sales rather than your balance sheet.

Invoice Factoring helps you to maintain a healthy commercial relationship with your customers. By outsourcing the credit management function to a factoring company, you can provide your service or product without the uncertainty of wondering if your new customer will be able to meet your payment terms.

Invoice Discounting is a similar service to Invoice Factoring, in that it gives you cash advances up-front based on your invoices. However it is aimed more towards larger established businesses, as it allows them to keep control of their sales ledger while still benefiting from increasing their working capital.

The invoice discounting company does not disclose to your customers that you are using the service, allowing you to keep greater control of your client relationships. The service can also be linked to lending against other assets, such as stock, machinery and property.

Invoice Finance is used by around 46,000 businesses in the UK.

The types of business that best fit the invoice factoring and invoice discounting model are those which provide services or goods to other businesses and which need a steady cash flow in order to pay everyday costs such as staff and overheads.

Here are just a few of the types of business that have already grown using invoice finance:

Anne Lloyd was working for a large, Bristol based nursing recruitment agency when she first thought about setting up on her own. Though earning a good minimum salary of £30k pa, she was constantly aware of the rewards that running her own agency would offer.

Like many entrepreneurs Anne had no experience of payroll or accounting and the success of the business rested on her selling ability and contacts. Her agency supplies nurses and auxiliaries to NHS Trust hospitals and to care homes, and she estimated that they would pay her within an average of 45 days.

BEC Local Manufacturing is a manufacturing company that supplies specialist fixings to the plumbing industry. Their customers include a major buying group and a number of builder’s merchants.

Steve, the managing director, started the business in his garage 11 years ago and grew it to a £1.5m turnover through retained earnings. His accountant was constantly concerned at the level of capital expenditure required to meet demand.

Unlike a business overdraft, invoice finance funding is based on the invoices you raise. As such, invoice finance (invoice factoring or invoice discounting) will grow with your business, without the need to go back to your bank to renegotiate your overdraft.

Invoice finance is thus a flexible and innovative alternative to more traditional funding methods, reflecting your company’s current position and not basing a decision on how it has performed in the past.

Touch Financial is the UK’s leading Invoice Finance broker. We exist to help you find the right facility for your business. Our independent advisors have many years of industry experience from both sales and client management perspectives.

As such, we know the likely pitfalls and SMALL PRINT better than most!

The following section highlights a number of things to watch out for when considering invoice finance – invoice factoring and invoice discounting.

The following section details terms which are commonly associated with invoice finance.

If you are looking for a specific term, click one of the following links to go to the relevant section:

A – C | D – F | G – M | N – R | S – Z

The following section details terms which are commonly associated with invoice finance.

If you are looking for a specific term, click one of the following links to go to the relevant section:

A – C |   D – F |   G – M |   N – R |   S – Z

The following section details terms which are commonly associated with invoice finance.

If you are looking for a specific term, click one of the following links to go to the relevant section:

A – C | D – F | G – M | N – R | S – Z

The following section details terms which are commonly associated with invoice finance.

If you are looking for a specific term, click one of the following links to go to the relevant section:

A – C |   D – F |   G – M |   N – R |   S – Z

The following section details terms which are commonly associated with invoice finance.

If you are looking for a specific term, click one of the following links to go to the relevant section:

A – C |   D – F |   G – M |   N – R |   S – Z

Invoice factoring is an outsourcing solution that allows businesses to improve cash flow by converting unpaid invoices sitting on the balance sheet in to money in the bank.

The thrill of the chase and hunting down orders is what drives most businesses, but once the deal is captured what happens next often presents big problems – that’s where a factoring company comes in.

Traditionally, companies have an overdraft to ease cash flow, but for a growing business with an expanding order book, often this is just not a flexible enough solution.

Debt factoring improves business cash flow by advancing money against unpaid sales debtors.
This is a valuable facility for businesses short of working capital.

A business that is owed £500,000 could raise £450,000 in days by debt factoring.

If the trade debtors stayed on the balance sheet without debt factoring, depending on how many invoices make up the £500,000, a business offering credit terms could wait between 30 and 90 days to have the cash available.

If your business has working capital is tied up in unpaid invoices and you need to free up the money, then a factoring service might be the best solution.

Factoring is performance related finance that expands as your business grows. The accent is not on how you use the funds generated from factoring, but that you have a sound business underpinned by good management.

Factoring UK is a big industry with almost 50,000 businesses receiving just under £18 billion of finance in the most recent quarterly figures issued by the Asset Based Finance Association (ABFA).

ABFA is an umbrella organisation representing the interests of most of the UK’s major factoring services.

The common theme for all these businesses is they had billions unlocked from their balance sheets as working capital instead of sitting representing dead money as trade debtors.

The finance released covers domestic, import and export sales.