FAQs
- What is Receivables Based Finance?
- What is Invoice Discounting?
- What is Full Service Factoring & Credit Control?
- What is Stockline?
Receivables based finance is a flexible revolving working capital facility aimed at supporting your finance needs, whether through a period of growth, acquisition, consolidation or recovery.
It works by converting a customer’s trade debtors, typically its largest asset, into cash. As a receivables finance customer you agree to sell your trade debts to the bank which will, in return, pay you 75% to 90% of their eligible value immediately rather than having to wait until your customer pays you. The balance of the purchase price, less our charges, is paid to you when we receive payment from your debtor.
Receivables finance is a flexible and dynamic form of funding which increases in line with your sales, enabling you to exploit new business opportunities.
The facility can be totally confidential between you and the bank and your debtors will not be aware that you have a receivables finance facility as you collect all payments from your debtors and bank them to us. This is called Invoice Discounting.
Alternatively we can manage your debtor’s ledger for you, in which case we will provide high quality credit control services as part of the facility, contacting your debtors and collecting payments in accordance with a credit control cycle that is agreed between us. This is called Full Factoring. This facility may improve your overall debt turn thereby reducing your borrowing needs.
Our credit control services are also available on a standalone basis, without funding, and many customers use us for the high quality credit control we can provide.
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What is it?
- It offers the customer a revolving working capital facility
- It releases the funds tied up in trade debts, often a businesses’ biggest asset, allowing the customer to exploit new growth opportunities or avail of early settlement discounts from suppliers
- It is available to both existing and non-Bank of Ireland customers
- It is complementary - works alongside existing bank facilities
- It is available for use in all major currencies
What Does it Cost?
- A discounting charge (very like an interest charge) is charged on the funds drawn.
- A Service charge, typically calculated as a percentage of invoices notified to us, or an agreed fixed monthly sum.
Who Can Use It?
- Sole traders, partnerships and limited companies
- Profitable, fast growing businesses
- Management Buy Outs
- New businesses with insufficient track record to apply for conventional bank facilities
- Primarily suitable for customers in manufacturing, wholesale, distribution and service industries
What are the Benefits of the Facility?
- Invoice Discounting allows the customer to release the value of funds tied up in its outstanding unpaid invoices by converting trade debts into cash
- It is flexible as the amount of cash the customer can draw increases as its sales increase, thus making it ideal for both growing and established businesses
- It is secured on the customer’s sales ledger so there is usually no need for additional pledged security
- It can be confidential or disclosed to the customer’s trade debtors
- It is supported by a secure automated online account management system, ‘I2Donline’ accessible 24 hours a day 365 days a year, giving real time information and a wide range of functions including requesting payments, notifying invoices, viewing and reconciling account data.
- It is an efficient and effective source of funding at a competitive price
How Does A Customer Use The Facility?
- The customer, in the course of its normal trading, supplies goods or services to its customers (debtors) and issues invoices for payment
- On a regular basis the customer notifes these invoices to Commercial Finance via its online account management system I2Donline
- Upon receipt of such a notification Commercial Finance releases up to 90% of their value with the balance available to the customer, less agreed charges, when the customer’s debtor pays
- If this arrangement is confidential then the customer will manage its own sales ledger and credit control and remit all of its cash receipts to us without its debtors knowing anything about the funding relationship
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What is it?
- It offers the customer a revolving working capital facility, or the customer can avail of credit control services only
- It releases the funds tied up in trade debts, often a businesses’ biggest asset, allowing the customer to exploit new growth opportunities or avail of early settlement discounts from suppliers
- It is widely available - open to both Bank of Ireland and non-Bank of Ireland customers
- It is complementary - works alongside existing bank facilities Additionally it
- Provides professional credit control services leaving the customer free to concentrate on growing its business
- Releases cash flow and may improve overall debtor days outstanding
What Does it Cost?
- A discounting charge (very like an interest charge) is charged on the funds drawn.
- A Service charge, typically calculated as a percentage of invoices notified, or an agreed fixed monthly sum.
Who can use it?
- Sole traders, partnerships and limited companies
- Profitable, fast growing businesses
- Businesses yet to develop a full sales ledger function
What are the Benefits of the Facility?
- May improve payment performance (debt turn) from a customers debtors resulting in additional working capital for the business
- Flexible funding that grows with the business
- Facility is secured on the customers trade debts often not requiring any additional security
- Experienced team of professional credit controllers
- Reduced administrative burden
- It is supported by a secure automated online account management system, ‘I2Donline’ accessible 24 hours a day 365 days a year, giving real time information and a wide range of functions including requesting payments and viewing account data.
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What is it?
- A working capital facility that allows a customer to buy Stock and pay for it on extended terms, allowing time to convert that Stock into sales.
- It's flexible - credit period up to 180 days
- It's complementary - works alongside existing bank facilities
Who can use it?
The customer’s business is likely to be:
- Operating in the manufacturing, wholesale and distribution or retail sectors
- Growth orientated with maximum 2-3 years' trading experience
- Selling annually in excess of £350,000
- The customer MUST have either an Invoice Discounting or Full Service Factoring facility with Bank of Ireland.
What Does it Cost?
- Bank of Ireland Commercial Finance charges a service fee of typically 2.5% (variable) of the Supplier Invoice paid and a fixed interest charge dependent on term of the loan.
What are the Benefits of the Facility?
- It allows for the pre-planning of funding for stock - ideal for times of seasonal peak requirements
- Enables the negotiation of bulk order discounts
- Enables the negotiation of settlement discounts for early payment
- Enhance customer’s reputation with their suppliers and improves buying power
How Would a Customer use the Facility?
- Bank of Ireland Commercial Finance pay the customer’s supplier invoice upon its written instruction
- In return the customer gives us a Bill of Exchange which we will present to its bank for payment after the pre-agreed credit period of up to 180 days
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