Products in Depth - Financial Solutions

Asset Finance

Commercial asset finance can be used to raise finance against most commercial tangible and non tangible assets. Non status lending is possible in many cases. Commercial asset finance can offer companies an attractive alternative to other forms of financing such as overdrafts or bank loans. Loans and overdrafts are often inflexible compared to commercial asset finance. By choosing commercial asset finance, a business can utilize the underlying value of its assets rather than just depending on its past financial performance to support an application for a loan.

Invoice Discounting

Invoice discounting is an alternative way of Businesses drawing money against their invoices. However, the business retains control over the administration of your sales ledger. It provides a cost-effective way for profitable businesses to improve their cash flow.

Invoice discounting is only available to businesses that sell products or services on credit to other businesses. It is normally only available to businesses with a proven track record and an annual turnover of at least £500,000.

Factoring

Invoice Factoring enables the business to get paid when it raises their invoices, regardless of when your customer actually pays them.

Invoice Factoring means the factoring company takes responsibility for securing the payment from your customers.

Trade Finance

Trade finance, also known as purchase finance provides funding for companies to pay suppliers for the purchase of finished goods, normally against firm customer order or where there is a proven demand for the product.

Commercial Mortgages

Commercial Mortgages are loans that are secured on commercial property such as shops, business premises, warehouses, factories, workshops, garages, hospitals and schools.

As with a residential mortgage the commercial lender will hold the title deeds to the property as security. In the event of arrears the mortgage lender can repossess the commercial property.

Company Voluntary Arrangements - CVA'S

The objective of a CVA is to allow a company which either, has an underlying profitable business or is saleable, to maximize returns to creditors or, in some circumstances allow payment in full to creditors and the return of the Company to its directors. It allows the company to repay some or all of its historic debts from future profits over a period of time. Directors stay in control of the company.

A Company Voluntary Arrangement (CVA) provides the company directors with more time so preventing the creditors from taking enforcement action via the court system. It is a cost effective method for avoiding outright insolvency for a company with financial problems.

A Company Voluntary Arrangement (CVA) is a private matter so the company will not appear in the papers sp avoiding negative publicity.

Difficulties are often encountered by the company in obtaining credit from suppliers post CVA, resulting in it experiencing cash flow difficulties. This can lead to early failure of the CVA.

IVA's

Normally an alternative to bankruptcy proceedings, where someone makes a voluntary arrangement with their creditors through the law courts for the settlements of debts. An Individual Voluntary Arrangement (IVA) debars a debtor from obtaining any further credit during the next five years. This is to limit the overall liabilities of an insolvent debtor under IVA.

Bankruptcies

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the bankrupt individual or organization).

Administration

Administration is a very powerful process for control, where a company is insolvent and facing serious threats from creditors. The Court may appoint a licensed insolvency practitioner as Administrator, this places a moratorium around the company and stops all legal actions for a 28 day period usually. The appointed insolvency practitioner then explores all avenues available being

  1. Restructure
  2. Sale
  3. CVA
  4. Liquidation

Liquidation

Applies to companies or partnerships. It involves the realization and distribution of the assets and usually the closing down of the business. There are three types of liquidation - compulsory, creditors' voluntary and members' voluntary.

Sole trader protection scheme

Applies to Sole Traders that are taking the bankruptcy route who also has mortgage arrears and pending repossessions over them. GCS shall work with the clients in these instances and write proposals to the Mortgagee in order to potentially hold off repossession.