Factoring & Invoice Discounting

These models work for larger and more mature businesses, if they have the right resources in place, but they are the wrong solution for start-ups due to cashflow issues and the restrictions implicit in these solutions. Hazards new agencies face include:

• These products only advance 80-85% of invoicing, so if you are growing, you will always struggle for funds
• Available funds will be impacted by concentration limits, funding limits and the speed with which your clients pay
• Intense stress of worrying each week if your clients will pay on time so you can pay your contractors
• Low headline fee is inflated by the interest charged daily on funds outstanding, minimum monthly charges, drawdown costs, and re-factoring costs if an invoice exceeds terms

Talk to us to discuss these issues in more detail and to find out how our model avoids these drawbacks.

LLP & Funder Principal Models

Limited Liability Partnerships or LLPs, otherwise known as an introducer or funder principal model, are where the agency invoices and pays workers in the name of the funder for a minimum contract term of 12 months. Disadvantages include:

• Your company turnover is not your total sales, but just the profit you make after your provider’s fees
• This has financial implications for the company and for directors when tendering for business, applying for grants, loans or mortgages
• You incur extra payroll for apprenticeship levy as your provider’s payroll is in excess of £3m per year
• You aren’t building your brand or a valuable asset
• You can feel that you are still working for someone else instead of running your own business

Talk to us to discuss this in more detail and to learn how we avoid the need for such a restrictive arrangement.