How to Change Invoice Finance Companies

How to change invoice finance lendersAre you looking for a new invoice finance company? Perhaps you’re unhappy with the service you’re currently receiving, or you’re simply looking for a better deal.

Whatever the reason, it’s important to choose the right company to suit your needs. Invoice finance is a vital part of many businesses, so it’s important to make sure you’re getting the best possible service.

Here are a few things to consider when choosing a new invoice finance company.

First, consider your specific needs. What type of business do you have, and what are your invoicing requirements? Make sure you choose a company that offers the right type of financing for your business.

Secondly, compare rates and fees between different companies. It’s important to find a competitive rate that suits your budget. Finally, take some time to read reviews and compare customer experiences.

This will help you to choose a reputable and reliable company. Change can be daunting, but it’s important to make sure you’re getting the best possible service for your business. With a little bit of research, you can find the perfect invoice finance company for your needs.

Your business may be using some sort of invoice finance, may it be invoice factoring or invoice discounting and looking to change lenders.

If you are one of the uses that is looking to more your invoice finance facility to another lender but not sure how to do this we can help.

As a leading broker in this space we can help assist you to find a new provider that fits your businesses sector. Many businesses believe that switching invoice finance providers will be difficult and time consuming.

How do I change my finance company?

To change your finance company is really simple, the first thing you need to do is serve notice that you with to terminate. Factoring companies will require written notice to terminate the contract.

There are many reasons why a business might want to change invoice finance companies. Perhaps the current provider is not meeting the needs of the business, or the terms of the contract have become unfavorable.Whatever the reason, changing providers can be a complex and time-consuming process. Here are some tips to help make the transition as smooth as possible:

1. Do your research: Not all invoice finance companies are created equal. It’s important to compare different providers to find one that best meets the needs of your business.

2. Give notice: Be sure to give your current provider ample notice that you intend to switch providers. This will help avoid any penalties or fees associated with early termination of your contract.

3. Transfer information: Make sure all relevant information, such as contact details and account numbers, is transferred to the new provider. This will help minimize disruptions to your invoicing process.

4. Train staff: Staff will need to be trained on how to use the new system. This may require some time and effort, but it will be worth it in the end.

By following these tips, you can make switching invoice finance companies a relatively painless process.

Factoring companies have a standard termination notice period of between 30 – 60 days prior to the renewal date.

Looking to change Invoice Finance Companies

Maybe there are a number of reasons why you might consider switching to another Invoice Finance provider. The level of service could not be what you had been promised, or simply you maybe experiencing rising costs. This said you may feel that you could get the service more cost-effective elsewhere.

The two main reasons in our experience why you might be hesitant in switching providers are:

  • You feel that is a time-consuming process and lengthy overall
  • You are still within a contract period and as such you will be charged if you leave.

Inform your Finance Company you’re changing

Once you have made up your mind that you are changing or even considering changing your invoice finance company, this first thing to do it to inform them. The encumbered factoring company you presently use may come back with an improved factoring deal.

When you’re ready to move on from your current provider, it’s important to let them know so that they can update their records. The process is usually pretty simple – most companies just require you to fill out a short form or give them a call.

However, it’s always a good idea to check with your current provider to see what their specific requirements are. Once you’ve taken care of the administrative details, you’ll be free to start working with your new factoring company and begin reaping the benefits of their services.

With a little advance planning, making the switch from one provider to another can be a seamless and hassle-free experience. If you still wish to leave you need to serve notice on the provider that is is your wish to cancel the agreement and leave by serving notice on them.

Review the Costs of your Finance Agreements

Should you wish to terminate your agreement with the invoice finance lender you maybe required to pay a penalty charge to change providers. This needs to considered when looking at other deals, they termination costs may not be worth it overall.

Switching companies can be a difficult process sometimes and some people do not like change but if you feel there will be major benefits of using a new factoring company, and this would far outweigh the costs of changing factors, then you should proceed with the process.

Hassle to change Financing Companies

Many businesses choose to work with a Finance Company in order to receive funding quickly and without hassle. However, changing Factoring Companies can often be a complicated and time-consuming process.

First, businesses will need to notify their current company of their intent to switch. They will also need to provide the new company with a list of invoices that they would like to be funded. The new company will then need to review the invoices and determine how much they are willing to advance.

In some cases, the new company may require additional documentation from the business in order to make a decision. Once all of the paperwork is in order, the business will need to provide its bank account information to the new company so that funds can be transferred.

The whole process can take several weeks, during which time businesses may not have access to the funding they need. As a result, it is important to carefully consider all options before changing Factoring Companies.

There are a number of reasons why businesses change invoice finance providers, maybe a breakdown of a relationship between client and lender, or simply there is no need for the service and the business is self funding.

The process of switch invoice finance providers has been made easier over the years with the use of technology. In reality businesses have been switching providers time and time again over the years, to ensure that they get the best rates available.  This process is now very quick, simply and relatively pain free.

What is involved in the process?

Both lenders, the outgoing and incoming will complete the majority of the transfer between themselves. This leaves the business owner to get on with their day to day business activities.

The incoming lender will complete a due diligence on the business and the book debts. Once everything meets their criteria the lender will issue an offer letter. Once the business owner has acceptable the offer then the transfer process can begin. The incoming lender will make contact with the outgoing lender, at this point they will agree a date for the transfer to complete. The transfer of the finance facility will be managed by the two lenders on behalf of the business.

A funding calculation will take place by the incoming lender on transfer day. This is where they will work out how much they can generate from the debtor book on that specific date. This calculated will be used to repay the outgoing lender. Any residual balance that is left will be placed into the businesses new facility for future use.

When changing factoring companies you need to be aware that you are responsible for paying any charges such as survey costs. This process is called ‘Change Factoring Liftout’.

Read more: Switching factoring companies

Costs to change Lenders

If there is any outstanding fees to the old lender, one way to over come this is to submit new invoices to the new factoring company. These can be used to payoff the outstanding invoices at your old factor. There would be no additional cost to make the change to a new lender then.

Some factoring companies offer reduced fees on old invoices which are part of a buyout this is dependent on the size of transactions. Meaning if they lift out a facility they may only allow 50% on old invoices you have already submitted to your old lender.  Notice of intent to terminate should be given at the earliest opportunity to your old factor to avoid any early termination fees, if you are leaving their contract prematurely

How long to change Invoice Finance lenders

If you are changing from one lender to another lender the whole process can take 14 working days. This is two to three days longer than setting up a normal factoring application setup process.

The additional days are needed for the new lender to carry out invoice verification, as well as on the day before lifting out carry out their liftout calculation that needs to be sent to you for your approval.

Need help to change funder?

If you are a user of any type of invoice finance, such as factoring or invoice discounting and looking to change providers, we can help you through the process.

Simply complete the online enquiry and use our 15 years of experience for free!

Business Finance specialist at Invoice funding | + posts

Seasoned professional with a strong passion for the world of business finance. With over twenty years of dedicated experience in the field, my journey into the world of business finance began with a relentless curiosity for understanding the intricate workings of financial systems.

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