Founded in 1993, Ashley have provided straightforward funding solutions to SME (Small to Medium sized Enterprises) in the UK for over 20 years. Due to their flexibility of financial facilities and professional expertise, they have become one of the most popular lenders in the country, all without affiliation with the banking industry.
Factoring or Discounting
Invoice factoring and discounting are very similar methods of financing, where future income, in the form of invoices owed to you, are sold in order to access funds quickly. While the majority of the practice is similar, there are a few differences. Factoring will generally require the factor to involve themselves in the collection of debts and the running of the company’s finances, while discounting allows a business to maintain a greater degree of control, and therefore responsibility, in this area.
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Ashley Invoice Factoring
All factors come with inherent pros and cons but it should be understood that these are not universal. What might be an advantage for some will likely be a disadvantage for others. Understanding the specific features provided is therefore vital to getting the most from the relationship. The main features provided by Ashley invoice factoring are:
- 90% of Funds Made Available
- Efficient Service
- SME Focus
- £250,000 Limit
Flexibility is key to any invoice finance contract and Ashley provide some of the most flexible contracts in the industry. This allows a business, in particular a small business, to grow without needing to worry about rigid contract clauses. This in turn provides enough support for the foreseeable future and greater planning. It should be noted that there is a maximum credit limit to be taken into consideration. More on that later.
90% of Funds Made Immediately Available
Although 85% is typically the limit for their customers, larger and more established businesses can take advantage of up to 90% of the value of invoices being made available to them. This can be significant for some, particularly larger businesses who need to process higher value invoices. The remaining 10-15% is made available upon payment from your client, minus prearranged fees.
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Another vital part of running a well maintained invoice financing service is efficiency. As cash flow solutions are the main reason a business will seek the services of a factor, fast processing of payments is essential. Ashley provide funding within 24 hours of the presentation of an invoice, meaning there is little delay in being able to access your finances.
Ashley Business Finance were founded with a brief to support small and medium sized businesses so their service is tailored to suit the specific needs of companies of this size. This not only accounts for their general flexibility but also their ability to support, even the smallest of businesses, every step of the way. This is of particular use with invoice factoring, where the factor is able to take on the responsibilities of seeking payment from their clients.
Annual Turnover Limits
As the entire business model is focused on SME, Ashley are not suited to large businesses. This is apparent when looking at annual turnover limits, where there is no set minimum, something that is essential for start-ups for example, and a maximum £250,000 credit limit over the course of a year. While this policy is enormously beneficial to small businesses, it does preclude larger firms from being able to access the service.
Ashley Invoice Discounting
Almost all the features that are available with factoring are inherent with Ashley’s discounting service. There are, however, some specific parts of the discounting service that differentiate it from factoring.
- Further Control of Finances
- Single Invoice Financing
Further Control of Finances
For some, the idea of signing over that level of control to another company is not a welcome thought. Although many businesses can benefit from this practice, it is an unnecessary burden for others. By using Ashley’s discounting service, businesses are able to maintain control over most of their financial practices.
While the use of an invoice financier makes for more efficient debt collection and a more professional practice, it can be off putting to many clients if they have to deal with a third party. Anonymity provides the best of both worlds, where your clients deal with experts in the field and your business benefits from the professional service that Ashley provide.
Single Invoice Factoring
Although single invoice factoring is nearer to factoring than it is discounting, the absence of the factor dealing with the day-to-day managing of your finances makes it comparable to discounting as well. Single invoice factoring can be a costly solution but is helpful in certain circumstances, particularly high value invoices. Ashley provide up to 80% of their value within 3 hours of presentation, all without the need to sign lengthy contracts, with the further 20%, minus fees, released upon payment from your client.
Because no one can foresee what the future holds, what is generally a straightforward practice can become complex when problems with your business arise. It is therefore important that the invoice financier provides some level of support.
Support lines are UK based and, although there is no one allocated manager to access, fully trained staff are always there to provide feedback and support. As Ashley focus on small to large businesses, including start-ups, they offer a unique expertise that goes beyond the simple practice of invoice financing.
Our guide to the best invoice factoring companies in the UK should help give you a greater understanding of what would be most suitable for you.