Considering Invoice Finance? Our Market Research Findings Summarised

If you are considering using invoice finance (which includes both factoring and invoice discounting services) you should read this article first as it summarises the last 5 years worth of research that we have conducted regarding the sector. Below I have distilled all the results into the key information that anyone considering using such products, needs to know.

Invoice finance is not used by an enormous number of businesses within the UK, but it is used extensively by fast growing businesses. We have estimated that about 0.86% of all UK businesses currently use these products, compared with the vast majority of businesses that will use some combination of overdraft, loan or family money to fund their venture. There are a number of reasons for this. Approximately 25% of businesses are likely to be eligible (higher if you include retailers for who there are now specialist funding products). Eligibility is generally linked to trade of the business. Those which sell goods or services that are “sell and forget” are most suited, and the sales have to be to other businesses, on credit terms. So if you factored that in, one might estimate the market penetration to be around 4% of eligible businesses.

There are two key reasons for the low number currently using these services. Awareness of these products is extremely low amongst UK companies. Our studies have repeatedly found that one of the key issues for this sector is that businesses do not know about, or understand these products. The other reason is price. Businesses tend to expect that these services will be much more expensive than they actually are. Often they do not have access to the whole market so are unable to compare the deals that are available across the broad range of providers that serve this sector. Also, when determining value for money, the benefits from services such as factoring, which includes outsourced invoice collections and credit control, needs to be factored in.

Turning to the fast growing businesses, we conducted a study that found 12% of businesses that were growing their turnover by 20%, or more, per annum, were using invoice finance. The concentration was even higher amongst those that said they could not grow any faster than they were already. 52% of those “maximum growth” companies told our study that they were using these services. The reason for this is that as the turnover of the company grows so the level of finance grows in line with the business.

We have studied new startups and found that only 2% were using these services. In most cases they either didn’t know about these products or assumed that new startups would not qualify, which is incorrect. There are specialist services designed for new start ups.

These are a few of our other key findings that have arisen from studies of existing invoice finance users:

98% of existing users told us that they would recommend invoice finance.

On average a business will use these products for 5.28 years during which time they will normally change provider once, in 42% of cases to improve on price.

The cheapest invoice finance company varies according to product and the circumstances of a particular prospective user (we have studied this using mystery shopping techniques).

Customer satisfaction levels, according to our independent research, tend to be 45% higher where an independent receivables financier is used as opposed to a bank offering these services. Despite this, 51% of users that we surveyed, said they had found their way to these services through their bank.

FundInvoice have been able to save 4 out of 5 businesses money on prices quoted elsewhere. On average they have saved clients 37% of their invoice finance costs.

If you want to see the details of the sources and nature of the studies that lie behind these findings they can all be found in the research section of our site.

What Are the Basic Differences Between Chapter 7 and Chapter 13 Bankruptcy?

Bankruptcy can be an overwhelming topic to understand, but many who investigate the available options will discover that the two choices available are Chapter 7 and Chapter 13. These two options are handled very differently and it is important for those considering bankruptcy to know the differences when choosing how to proceed. Both are nuanced and complex, but there are some major differences in how these options are pursued and completed that can help an individual know which may work best for his or her needs.

Bankruptcy is known as an option for those facing overwhelming or insurmountable debt. If the debtor elects to pursue Chapter 7 bankruptcy, all of the individual’s non-exempt property can be sold by a trustee in order for the proceeds to be put toward the debt.

However, Ohio and Kentucky both allow for many property exemptions. Most Chapter 7 scenarios are actually considered “no asset” cases, meaning that the debtor will not be forced to part with any property and the creditors will receive no proceeds. It can be difficult to know what assets are exempt during this process, but a bankruptcy attorney can be highly beneficial in analyzing your situation to help you understand what property would be considered exempt when filing under Chapter 7.

Some of the common exemptions during this process include:
• Homestead – real or personal property
• Personal Property – burial plot, motor vehicle, bank accounts, tax refunds, household goods, furnishings, musical instruments
• Wages – minimum of 75% of disposable weekly earnings
• Pensions – tax exempt retirement accounts, public employee pension
• Tools of trade – tools, books, implements
• Alimony – alimony and child support
• Insurance – disability, life, group life
• Misc. – business partnership property
• Wildcard – $1,150 of any property

This type of filing is beneficial because it negates the debts that a person owes. While some property may be lost, often times a person can be relieved of most of their debt. In addition, this method is typically a more efficient and quick way to complete a motion for bankruptcy. It does still carry long-term consequences, though, so this option should be considered carefully.

Chapter 13 bankruptcy is often a more complicated process. This option typically is more appropriate for those who would like to protect their assets while repaying their debts in a more forgiving environment. The courts will protect a debtor who files under this plan in order for them to pay back mortgage debt or other payments through a longer period. This situation can provide protection for cosigners or other third parties on items such as automobiles.

Another important difference in the two options is that certain types of debt cannot be discharged under Chapter 7 but are eligible under Chapter 13. One of the major debts involved is any debt regarding property settlements during a divorce. These debts cannot be discharged under Chapter 7, so it is important to consider this if debt through a divorce is part of the cause of filing for bankruptcy.

Eric Steiden helps those filing for bankruptcy in the Ohio and Kentucky areas to complete this stressful process as smoothly as possible. With nearly 20 years of experience in successfully guiding clients through a range of bankruptcy needs, he confidently helps his clients to understand the differences between chapter 7 and Chapter 13 bankruptcy, whether or not they should file, and exactly what steps that will be most beneficial for their short and long-term needs.

Tips to Managing Your Debt Effectively

Thousands of people around the world are so deep in debt that they experience constant stress, restless nights and their performance at work starts to suffer. Many will become physically ill because they realise that they have borrowed too much and their salary doesn’t cover the bill by the end of the month.

All it takes is one family member to lose their job and their world can drop out from beneath them. The dread when the phone rings to find a creditor on the other side of the phone or avoiding answering the door, in case one of the creditors are standing there wanting to collect. In addition to this, it severely affects your credit score.

Not everyone’s debt is their fault. Many institutions love throwing great deals your way from credit cards to loans to shopping accounts and more. It’s so easy to build up debt these days, but you have to also ensure that you don’t borrow more than you can repay.

There are a number of ways to ensure you don’t get into serious financial trouble, enabling you to put food on the family table each night. When you find that your debt is taking over your life and you have absolutely no way to repay it, it may be time to consider asking for bankruptcy advice.

The first is to consider selling some of your assets to repay your debts. This is not a pleasant solution by may be your only solution moving forward. If you were to file for bankruptcy, this is what would happen and if you have any secured debts, chances are they are going to come after your home or car in the near future if you continue to not pay the amount due. Consider selling excess assets, if you have a laptop, phone, tablet and desktop computer, consider selling one or more of the items, you don’t need them all, this can free up some cash to pay towards one of your monthly bills.

Another solution is that if you have two cars, but only really need one, consider selling the more expensive to run vehicle and use that cash to pay off some of your debts. Don’t fall into the trap of paying off accounts and credit cards using credit cards for payment. This can turn into a nasty cycle, which can leave you deeper in debt moving forward.

Speak to your creditors where you are having trouble meeting your payments and see if you can work out a payment arrangement. Remember your creditors want to ensure that they get their money, so they may be willing to come to a compromise, accommodating what you can afford, as long as they get their money back in the long run.

Try and pay all your bills on time. While this may sound an obvious solution to avoid bankruptcy in the future, it may not be the easiest. Paying your bills on time reduces the risk of late penalty charges and additional interest, this all increases over the months, leaving you with even more money you owe when you’re ready to make your next payment.

You can ask your family for money to help you get back on track, but remember that is leaving you in the same situation where you now owe them the money. If you cannot afford to repay, this can put strain on the family.

The final choice is to get some bankruptcy advice. Specialists are able to advice you moving forward, helping you decide if bankruptcy is the right solution to help you get your life back on track and eliminate the stress you experience on a daily basis.

Understanding Bankruptcy And Its Concepts

Many people are under the impression that bankruptcy turns your entire world upside down, leaving you with a poor credit history and unable to get any credit for long periods of time. This solution is available to those that cannot afford to repay their debt, leaving them little choice but to find out more and start their lives with a clean slate.

This debt solution works when it’s started either by you or one of your creditors. It is a formal court procedure which lasts up to twelve months. During the twelve months you will be given a list of things you cannot do and a trustee will take possession of your assets, paying off your creditors and leaving you debt free at the end, a chance to start new. Don’t worry you are able to keep your personal belongings.

There is a number of things you must know, which is why it’s advisable to get bankruptcy advice from a team of professionals who understand what this type of debt solution entails, walking you through the process and standing by you up to the end.

The twelve months before you can start afresh is just a guideline. If you choose to not comply with any of the rules, you can lose the status or it can take considerably longer. There are conditions, this usually means that you cannot take out credit during this time, sometimes you are unable to work, this depends on the type of place you hold within the company.

After the twelve months is up, you are free of debt and creditors cannot claim against you. In most cases unsecured debt is off so you can start your life fresh without the stresses and worries that comes with owing so much money.

After entering your name on to a public register, which means that you cannot hide the fact that you filed for bankruptcy. Even at later stages when you apply for loans and credit cards, you have to advice of your status. During the twelve month period, you cannot apply for credit and a few banks that will consider giving you a bank account to help you manage your daily life moving forward.

While many people are under the impression that this is disruptive to their lives and the risk of losing their jobs or not being able to open a bank account is too much to bear, for others it’s a blessing.

This is a last resort, when you realise that there is no way you can repay your debt. It’s not the first thing to look into. It’s also important that you seek professional bankruptcy advice, learn all there is about the process and how it can affect you before you make any final decisions.

One thing you must know is that filing for bankruptcy doesn’t come for free, there are charges and fees that have to be paid, which can make it difficult when you’re already struggling with debt. This is why you need to get the advice from a specialist with years of knowledge and experience in the industry. There are statements, information and forms to complete, all of which have set deadlines which must be met. Knowing the facts, knowing what to expect and knowing the process can help you decide if this is the right choice for you moving forward.

Reasons to Declare Bankruptcy

Though the very term might send many people into a dizzy, declaring bankruptcy is not always a bad thing. Sometimes it might be your biggest saving grace in times of financial upheavals. However it has its downsides like bad credit scores, difficulty in obtaining and conducting future financial transactions and the like. Filing for bankruptcy is also a long, tiring, expensive and time consuming procedure. Some of the times and reasons when you can legitimately declare bankruptcy are:

When Credit Card Debt Takes Over Your Life

When you realize that you literally have no money (cash) to pay for your day to day expenses, it is time to realize that things are not right financially for you. You need to put the gas, grocery, medical bills, food and pretty much everything else on the credit card tab, you know that your situation is worse than you think. Also you might be paying off your credit card debt loan with another credit card. One credit card is used to pay the other’s debts. On top of this, the credit card company would have increased their interest rates to 30%, your over-limit fees are skyrocketing, and your miseries are only increasing by the day. When all this happens you know that you are unnecessarily accumulating debt and increasing your interest rates and now it’s time to file for bankruptcy.

Increased Interest Rates

You would have realised that it is hard enough to pay off your debts with the existing low rates, but in the case that you have missed a few payments then your interest rates will go up. Sometimes these interest rates can go up to 30% more if you missed a few payments. This means that more of your money is now going into paying off the interest rates than on the principal. This is going to further increase the time it will take to repay the debt. If you are not able to pay off these high interest rates or negotiate your way to lower rates from the lenders then declaring bankruptcy is probably the best option.

Job Loss

In times of recession, when people were shown the door by millions, declaring bankruptcy was becoming a huge thing. People were not able to pay their huge debts and loans with the dwindling economic conditions as it is. Losing a job only makes things more difficult. This is often one of the most common and popular reasons why people declare bankruptcy. Most people manage to pay their consolidate credit card debt and other types of loans with their overtime allowance and various other types of allowance. In the case that there is no job available, it might be really difficult to pay off those bills in the first place. You might end up having to sell your assets to pay off your medical bills and other day to day expenses itself. In this case, paying off loans almost becomes an impossible task. Hence declaring bankruptcy might be a way out of this difficult situation.