Why Review Your Invoice Finance Facility

Invoice finance is a powerful tool for managing cash flow, but many businesses don't realise they may be paying significantly more than necessary for their facility. Last month, we reviewed the facility for a mid-sized logistics company that had been with their lender for three years. What we found shocked them—and it could shock you too. Here's what happened, and why you should review your terms now.

The Case: A Logistics Company's Wake-Up Call

Our client—let's call them "TransportCo"—had secured their invoice finance facility three years ago when they were smaller and considered higher risk. At the time, the rates seemed reasonable. But they'd since grown significantly. Their turnover was up 45%, their payment history was spotless, and they had a loyal customer base. Yet nobody had told them their facility might have become expensive relative to what they could now access.

When we reviewed their arrangement, we found they were paying 2.8% facility fee plus additional drawdown fees. Their advance rate was locked at 75%. Meanwhile, the wider market had moved on. We approached several alternative lenders and found options offering 1.5% facility fee, higher advance rates of 85%, and better terms all round.

The result? By switching their facility, we saved TransportCo over £7,200 in the first year alone—on a monthly draw of approximately £60,000. That's money they could reinvest in their business, pay down debt, or distribute to shareholders. And it all came down to a simple review that took a few hours.

What You Should Review

When examining your invoice finance facility, pay close attention to these key areas:

• Pricing and Fees: Your facility fee, drawdown fee, and interest rates. Even small percentage differences compound significantly across the year.
• Advance Rates: What percentage of your invoices can you draw down? A higher advance rate (typically 80-90% vs 70-75%) means better cash flow without additional borrowing.
• Funding Limits: Has your business grown beyond your current facility limit? You might be leaving money on the table or forced to work with multiple lenders.
• Service and Support: Is your lender responsive? Are there hidden charges or restrictive covenants?

See TransportCo's Real Saving

Here's the month-by-month comparison for TransportCo. On the left (green) is what they were paying with their original lender. On the right (red) is what they were being quoted elsewhere. Take a look at the cumulative difference:

Over a full year, TransportCo's original facility cost them approximately £14,800. The new facility came in at just £7,600—a saving of over £7,200 annually. For TransportCo, this wasn't theoretical. They made the switch within four weeks and immediately felt the benefit in their cash flow. If they'd continued with their original lender for another year without review, they'd have wasted another £7,200+.

Why Did TransportCo Qualify for Better Rates?

TransportCo's situation is instructive. Three years ago, they were genuinely higher risk—newer business, less established. The rates reflected that. But by the time we reviewed them, everything had changed:

• Turnover had grown 45% and stabilised
• They had three years of clean payment history
• Their customer base was now established and loyal
• They had better financial controls in place
• Their credit profile had improved significantly

Yet their original lender hadn't reviewed their rates. It wasn't that the original lender was being unreasonable—they simply had no reason to proactively reduce rates unless they felt competitive pressure. That's why the review matters. A different lender, competing for business, could justify offering much better terms to a proven, stable company.

Could You Be in TransportCo's Situation?

If any of these apply to you, we'd strongly recommend getting a review done immediately:

• Your facility has been in place for 12+ months
• Your annual turnover has increased by more than 15-20%
• You've significantly improved your payment history or credit profile since you started
• You're paying more than 2.5% facility fee
• Your advance rate is below 85%
• You're paying more than £600-700 per month for your facility (higher draw volumes)
• You're considering expansion or additional funding

TransportCo waited three years. They missed out on three years of savings they could have accessed much sooner. Don't make the same mistake.

How We Helped TransportCo (And How We Can Help You)

Our process with TransportCo was straightforward: we gathered their current facility details, benchmarked their terms against the market, approached several alternative lenders with their profile, and presented them with competitive options. The comparison made it clear—they could save thousands by moving.

The switch took just four weeks. No disruption to their cash flow, no dramatic change to operations. Just immediate, tangible savings that hit their bottom line every single month.

And here's the thing: TransportCo didn't approach us looking for a review. They approached us for a different reason. But once we reviewed their facility, it became obvious where they were losing money. That's why we now make the review part of our standard process—because the savings speak for themselves.

We helped TransportCo save over £7,200 in year one by reviewing their facility. Our team at Fiskal can do the same for you—no obligation, no pressure. We provide a free, detailed assessment of your current invoice finance terms and show you exactly what's available in the market. We specialise in securing better terms for businesses of all sizes, particularly those challenging cases that mainstream lenders have rejected.