INVOICE FINANCE Cash flow solutions that support business growth 1
Contents Invoice Finance 3 Invoice Discounting 5 Factoring 6 How Factoring works 7 Payroll Finance 8 How Payroll Finance works 9 Additional support services 10 Our service promise 11 2
Supporting business growth Invoice Finance 1.6bn increase in asset based lending in Q4 2014 compared to Q4 2013 1 93% Clients rated our services highly 2 1 Asset Based Finance Association (ABFA) Quarter 4 2014 Industry Statistics. 2 Independent research with representative sample Dec 2014. When you re focused on growing your business, having access to cash is vital. It offers you the flexibility and potential to develop new products, target new markets or finance the acquisition of another business. Invoice Finance, which includes Invoice Discounting and Factoring, gives you access to incoming cash faster by helping you unlock income tied up in your invoices. That helps you get the cash you need when you need it. Supporting business growth As one of the UK s leading Invoice Finance providers we support businesses across all segments, from start-ups with a minimum turnover of 50k to multinational corporations. We can also provide international funding in various currencies against export invoices in many selected markets. We are members of the Asset Based Finance Association (ABFA) and have over 40 years experience in providing asset finance, so you can be confident in dealing with one of the UK s leading finance providers. We make it easy Our specialists work hard to understand your unique trading patterns and where you want to take your business in the future. That means we can provide a product that allows you to get on with running your business, certain of our support, confident in a tailored solution. Our termination pledge You will incur no termination fees if you choose to close your facility with us at any time, unless a fixed termination period has been agreed and documented by both parties at the outset of our agreement. All we ask is that you give us 28 days notice of your intention to terminate, and that all outstanding balances are cleared by the termination date. This will ensure we can transfer your facility within 24 hours of the agreed termination date. Terms and conditions apply. 3
250k+ A smart solution for businesses with annual sales over 250k 90% Up to 90% of invoice value released, typically within 24 hrs 4
Reliable cash flow with flexibility and control Invoice Discounting Step 1 You provide goods/services and invoice your customer as usual. Step 2 You provide invoice details to us. Step 3 We pay you up to 90% of the invoice value, typically within 24 hours. Step 4 Customer pays the invoice. Step 5 We pay you the balance of the invoice.* * After deducting our fees If your business has sales of over 250k and sound financial controls, Invoice Discounting gives you rapid access to the cash tied up in your unpaid invoices. Fast We can release up to 90% of an invoice s value typically within 24 hours, with the remaining balance available when invoices are settled, less our service fee. This can save you up to 30, 60 or even 90 days compared to your standard payment terms, freeing up cash more quickly to fuel your growth. Flexible By providing a solution that suits your trading pattern, funding can grow in line with your business requirements. As your sales ledger and turnover increases, the level of available funding can grow too. Professional Our arrangement with you remains completely confidential. You maintain your customer relationships, you retain control over your sales ledger and invoice issuing and payment is remitted into a trust account in your name. Case study During the recent economic downturn, a South Wales based road sweeping and planing company had just completed new premises when their former bank refused a commercial mortgage, leaving them with an overdraft and short-term cash flow problems. We quickly provided support with Invoice Discounting facilities. We advanced 85% of invoice values allowing the business to expand. 5
Unlocking funds to boost cash flow Factoring 50k+ Ideal for growing businesses or start-ups with sales of 50k or over on credit terms 90% Up to 90% of invoice value released, typically within 24 hrs Unpaid invoices can impact your cash flow. Factoring helps you unlock these funds and access a reliable source of cash. We have different levels of service to meet your business needs. It means the cash keeps flowing without tying up as much of your time in administration. Factoring lets you shorten the delay in getting paid and can boost your cash flow, so it s ideal for growing businesses, or start-ups with projected sales of 50,000 or over on credit terms. As part of the service, we will help you manage your sales ledger and can support your credit control processes by providing: client statements on a monthly basis debtor payment reconciliation credit control calls the level of support can vary to meet your needs credit information on your customers available for an additional fee. Factoring can help reduce the delay between sending out an invoice and getting paid, supporting your cash flow and helping your business run smoother. Case study A Plymouth-based engineering firm were suffering from administrative burdens including the stress of chasing debtors. Factoring offered a straightforward way of financing the business, allowing for effective cash flow planning and a reduction in administration. 6
How Factoring works Factoring Step 1 You provide goods/services to your customer. Step 2 You invoice your customer and include a notice of assignment that payment should be made directly to Lloyds Bank Commercial Finance. Step 3 Funding growth When you re not constrained by unpaid invoices, you ll have the cash flow and working capital on hand to fund growth at a time that suits you. Simple Once an invoice has been raised, you could receive up to 90% of its value, typically within 24 hours, with the balance available when invoices are settled, less our service fee. Practical You can also benefit from operational flexibility. In many cases, as your turnover increases, so can the value of your financing. We pay you up to 90% of the invoice value, typically within 24 hours. Step 4 We support your credit control to ensure payment is made. Step 5 Customer pays the invoice. Step 6 We pay you the balance of the invoice.* * After deducting our fees 7
Paying temporary contract staff on time Payroll Finance 100% We fund 100% of your weekly wage commitments If you re a supplier of temporary contract staff, meeting your payroll obligations can be difficult if you re waiting for your customers to settle their invoices, putting a strain on your cash flow and tying up funds that could be working harder for your business. As long as you ve applied for VAT registration, you can use Payroll Finance. Specialist team Our team specialises in providing finance for staffing businesses. It brings together all our sector knowledge and expertise in a single team, so we re able to provide the right financial package for your business. We can take care of all the details. Our fully outsourced factoring facility includes payroll management and debtor protection. Taking care of your admin We ll manage your payroll, sales ledger, credit control, HMRC requirements and more, leaving you free to grow your business. You pay for our service with just one fee expressed as a percentage of your sales. 100% funding We fund 100% of your weekly wage commitments paying your temporary staff directly on time, every time. We also pay you your agency profit margin every week, as long as all your invoices are fundable and minus our charges. 8 8
How Payroll Finance works Payroll Finance Step 1 You provide temporary staff to your customer. Step 2 You provide hours worked, rate, profit margin and timesheets to us. Case study A global recruitment specialist with a bold growth strategy found that other banks didn t have the recruitment sector expertise they required to cope with a tough economy. With our sector knowledge and experience, we were able to offer specialist funding leadership. Since 2010 the company s market share has significantly increased year on year, with turnover up nearly 300% to 120m. Step 3 We produce payroll calculation and pay your worker. Step 4 We produce your invoice and send to your customer. Step 5 We pay you your profit margin. Step 6 We undertake credit control to ensure payment is made. Step 7 Customer pays the invoice 9
Release tied up funds and protect your business Additional support services Freeing up additional funds Asset Based Lending (ABL), for businesses with a minimum turnover of 1m, works alongside our Invoice Discounting facility to help you unlock the cash tied up in your assets, such as: Stock Plant and machinery Property. Protecting your business in uncertain times Our Debtor Protection service can work alongside your Invoice Finance facility protecting your business against the risk of non-payment of invoices if a major customer fails. We ll cover you for up to 90% of the value of a bad debt suffered. Case study Challenging economic conditions threatened the clients of a leading supplier and manufacturer to the construction industry based in the North East of England. This in turn raised fears of substantial losses and cash flow problems for the business. We provided debtor protection alongside the firm s invoice discounting facility. When one of the business s building clients was declared insolvent owing 200,000, the firm s working capital was secured. Their liquidity was safeguarded and they were able to pay their creditors on time. 10
Our service promise. If you experience a problem, we will always try to resolve it as quickly as possible. Please bring it to the attention of any member of staff. Our complaints procedures are published at lloydsbank.com/ business/contactus
I d like to find out more Go to lloydsbankcommercialfinance.co.uk Or call us on 0800 3895084 Lines are open 9am to 5pm Monday to Friday, except public holidays. Please contact us if you would like this information in an alternative format such as Braille, large print or audio. Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service. Important Information Invoice Finance, Asset Finance, Asset Based Lending and Debtor Protection facilities are provided by Lloyds Bank Commercial Finance. Payroll Finance facilities are provided by Cash Friday. Lloyds Bank Commercial Finance and Cash Friday are trading names of Lloyds Bank Commercial Finance Ltd. Registered office: No.1, Brookhill Way, Banbury OX16 3EL. Registered in England and Wales no.733011. Lloyds Bank Commercial Finance Limited is part of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority for activities relating to certain types of consumer credit which are regulated under the Consumer Credit Act 1974 and by the Financial Services and Markets Act 2000. We are not deposit takers and are not regulated by the Prudential Regulation Authority. The provision of credit or leasing services by us is subject to your meeting our Credit approval. Please ensure that you only apply for credit or leasing services that you can comfortably afford. M60507