Finance your Management Buy-out with invoice discounting
Availability of finance short term is often a critical success factor in Management Buy-outs' and Management Buy-ins'.
Invoice discounting is a fast and secure way to use the working capital of the company for a Management Buy-out or a Managment Buy-in.
What is invoice discounting?
Invoice discounting is a type of lending that gives your business control over its working capital and provides the opportunity for growth. The commercial finance firm will advance you cash against your invoices and you retain control over your debt collection and credit control.
Simply Business works with invoice discounting specialists Aldermore Bank to provide an expert, inpartial invoice discounting service. There is no set-up fee and if unsure about the benefits, you can trial a facility on a monthly rolling basis to make sure it is right for you.
Benefits invoice discounting and Management Buy Out
- You'll have the capital quickly for MBO.
- When you issue an invoice you will know when it will be paid.
- No long term loan – the loan is repayed each time a client settles their invoice.
- The facility grows with your business so no need to keep increasing your overdraft.
- Invoice discounting is more competitively priced than overdrafts and conventional loans.
What does invoice discounting cost?
Invoice discounting is competitive compared with other financial products. Rather than charging interest and arrangement fees like a bank loan, invoice discounting fees are split into two parts:
- A Service Fee covers the day-to-day servicing of your purchase ledger. This can be between 0.5% and 3% of your turnover.
- Interest is charged against the amount of each invoice, usually at a fixed percent above the factoring company’s base rate.
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