THE FINANCING QUESTION
When this becomes relevant.
Start with the business circumstance, rather than choosing a product in advance.
- Growth has increased outstanding invoices faster than cash collections.
- Long customer payment terms limit the company’s ability to accept new work.
- A business wants to assess financing supported by completed, verifiable sales.
- Management needs to compare factoring with an asset-based revolving facility.
THE ASSESSMENT
What we examine.
These considerations shape the financing discussion and the information required for a meaningful review.
| Review area | What matters |
|---|---|
| Invoice quality | Delivery or service completion, acceptance, disputes, offsets, dilution and the supporting records. |
| Customer profile | Debtor credit, concentration, payment history, geography and assignment restrictions. |
| Commercial terms | Recourse, reserves, charges, collections control, minimums, notice provisions and termination terms. |
THE STRUCTURING PERSPECTIVE
A plan that fits the situation.
Invoice financing is not interchangeable with a conventional loan. We examine the effect on margins, customer communication and working-capital control. A higher advance does not necessarily mean more usable liquidity after reserves and other conditions.
TRANSACTION READINESS
What to prepare.
Begin with a concise overview. Detailed and sensitive records follow through an agreed delivery method.
- Accounts-receivable aging, customer concentrations and invoice samples.
- Sales history, credit notes, dispute information and existing collection practices.
- Existing liens, financing agreements and the proposed use of released liquidity.
The document list is indicative. The agreed service role, lender requirements and transaction circumstances determine the final package.