We regularly speak with businesses using invoice finance that never speak with their funder on renewal. In an industry with such competition Beacon Finance are firm believers that you should be reviewing your terms every year. Not only to look at pricing but to discuss how the facility operates, whether there is movement on concentration levels, advance rates or levels of personal guarantee.
Many businesses we speak with are subject to a 12 month invoice finance agreement with a 3 month notice period. This is the typical maximum contract length we organise for our clients as we strongly believe longer encourages complacency. We still regularly see two lenders signing up businesses for 3 years and recently we saw a 5 year contract, we believe this is far too long.
We have a number of lenders offering short term contracts or even one month contracts. Whilst this is the opposite extreme it demonstrates the confidence some lenders have to retain clients.
What to do near renewal
In the first instance you need to ask yourself has the invoice finance lender offered the service level and funding package you believed you originally signed for? If the answer to this is no then looking for another funder is key, regardless of the price.
If you are happy with the lender then a review is still key, the market changes year by year and if you have fulfilled your obligations and had a good year then asking for a better deal is certainly worth doing. We could still look to do a review and we base this on matching the right lender to your needs and looking to reduce overall costs.
Allowing renewal date to pass without a meeting or signing new terms as per last year is easy to do but is it best value for the business? We would argue that a free review to ensure you couldn’t get better is time well spent.
How Beacon can help
We assist a huge number of companies that are coming up for renewal. It is amazing to see the number of historic deals where we can beat their existing price and also better the overall package including advance rates and concentration levels. We can establish in a matter of minutes whether your pricing is below market average.
As a free service we can quickly get accurate indicative terms from lenders to see whether a change of funder could be worthwhile for your company. If you are nearing the end of your contract please do get in contact and we will quickly be able to assist.
You can contact Beacon Finance using email@example.com alternatively call us on 0800 304 717 or use the ‘Request Callback’ tab on the left of this page and fill out the contact form that appears.
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