Article Debt Management
An article in The Independent on Sunday recently put the growing consumer debt burden within the UK at £1 Billion with no signs of abating. It went on to quote new research by the adviser Debt Free Direct that indicates that 2.6 million people spend at least half of their monthly income paying off personal debts. Debt Management is becoming a major issue for the UK.
Debt management
In the course of our dealings with the owners of small to medium sized companies we have often come across many directors that have raised finance for their businesses through personal borrowing. This may be through personal loans, mortgages or through credit cards. This type of borrowing is often readily available, you only need to look at the number of mailers from personal loan companies that come through your letterbox each day to see that!
Despite the easy availability of personal finance, there are drawbacks to funding a business in this way. For example, the finance once drawn and used does not grow in line with the requirements of your business and in some cases the cost of the finance can be extremely high.
Specialist business finance products such as debtor factoring and invoice discounting are different. The finance is linked to the level of sales that your business achieves and so in this way the finance grows in line with your business and the costs can be less than borrowing for example on a credit card.
Within the personal debt burden that we are accumulating there will be numerous instances of personal finance being taken to fund business growth and these are instances where factoring or invoice discounting may be able to help and represent good practice.
The number of businesses that use debtor factoring has continued to grow significantly year on year and on average a clients stay with their providers for a number of years. As independent brokers, Cashflow Acceleration Ltd are able to access and offer impartial advice about the wide range of different factoring companies and invoice financing facility variants that are available in order to find the one that is most appropriate for your particular business.
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For further information about Factoring follow this link
For further information about Invoice Discounting follow this link
