FACTORING

t

LOOKTHEOTHERWAYWhen it comes to that little bit extra cash,most companies turn to their banks. Butthere are other options. Stuart Parker statesthe case for receivables financing.

Stuart Parker

The recession has remindedeveryone of the importance ofcash. Businesses without it or,more precisely, without a

healthy cash flow, are heading for disas-ter. Around 1000 UK businesses amonth are currently meeting such a fate.

Top of the listAmong the techniques for improving

cash flow, receivables financing, in theform of factoring and invoice discounting,must come top of the list. Indeed, thepopularity of receivables financing hasbeen growing rapidly as companies re-alise the benefits of this method of raisingcapital over more traditional forms of fin-ance, such as the bank overdraft.

In fact, there's really no comparison.Overdrafts have a fixed ceiling, have tobe renegotiated each year, and are oftenonly available against the collateral ofpersonal assets. As far as cost is con-cerned, overdrafts involve an arrange-ment fee and an annual renewal fee inaddition to the interest. Overdrafts arealso subject to instant recall.

Own moneyBy contrast, the finance released by

factoring and invoice discounting is noth-

ing more than the company's own moneymade available earlier through the saleof invoices for cash. Up to 80% of in-voice values can be provided immedi-ately with the balance, less charges, paidwhen customers finally settle.

This is almost like selling for cash andprovides companies using a factor witha financial facility which grows in line withsales and can be used in a variety ofways to develop the business.

Under a full factoring service, factorsrelieve their clients of the entire respon-sibility for credit assessment, sales led-ger administration and collection. Theyadvise on the creditworthiness of custo-mers, issuing statements and remindersand managing the collection processright through.

Larger companiesFinance on its own can be provided to

larger companies with computerised ac-counts administration and low bad debtrisk who, nevertheless, want to makeimmediate use of money tied up in tradedebts. In such cases, it is provided underthe invoice discounting arrangement,whereby cash is provided against all orselected invoices, companies remainingresponsible for their own accounts col-

lection and credit administration.100% protection against bad debts on

credit approved sales can be provided aspart of both full factoring and invoicediscounting. The knowledge that morecompanies went to the wall in the twoyears following the last recession thanduring it is promoting increasing interestin the credit protection element of thefactor's services.

Improved cash flow, saving in man-agement time, elimination of bad debts,the ability to expand sales with reliable,creditworthy customers are among theattractions of receivables financing.

As the recession eases, companieswill be looking for extra working capital totake advantage of the increased busi-ness the upturn may bring. The restric-tive lending policies of the clearing bankswill not help the economy to recover, andmany companies will increasingly turn tofactoring or invoice discounting to satisfytheir financial needs. [EQFor more information and a copy ofA Brief Guide to Factoring andInvoice Discounting enter ME31

Stuart Parker is chief executive of TradeIndemnity-Heller Commercial FinanceLtd.

MANUFACTURING ENGINEER JUNE 1992

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Assembly Engineering Buyer's Guide

This section appears in theJanuary, March, June and September

issues. To include an entrycontact:

David Houchin onTel: 0438 313311

Associated Alfing Kessler Ltd34 Warwick Road, Kenilworth, Warks CV81HE Tel: (0926) 58431. Fax: (0926) 50361UK Subsidiary of Alfing, Germany,specialising in Auto Assembly Machinesand Tightening Techniques. Alfingmanufactures a full range of DC or ACNutrunner Spindles, single ormulti-spindle, hand guided or machinemounted.For more information enter ME161

Brown & RootDefence and IndustrialWessex House, Market Street, Eastleigh,Hants SO5 4FD. Tel: (0703)625000. Fax:(0703)619808Contact Roger Marsh or Brian Gillett.Brown & Root design and supply flexibleand dedicated special purpose automationfor assembly, handling and testapplications.Equipment is manufactured, installed andcommissioned to satisfy client's specificrequirements. Services are available forproblem analysis, concept proving trialsand machine development. Control andinformation systems can be provided toallow full manufacturing systemsintegration.For innovation, integrity and BS5750Quality Assurance, Brown & Root is thecomplete automation supplier.For more information enter ME162

Cam Systems Ltd(successors to Altek Industrial)Unit 3, Rougham Industrial Estate,Bury St. Edmunds, Suffolk IP30 9ND.Tel: 0359 71303 Fax: 0359 71268Experienced suppliers of Turnkey systemsincluding robotics and palletised conveyorsfor automated assembly and processing.Agents for Panasonic IndustrialAutomation range of Cartesian, SCARAand 6 axis robots. Also modulargantry robotfor handling large masses in excess of 100kg. and machine loading of all kinds.For more information enter ME 163

Davis (Decade) Ltd30 Spring Lane, Erdington, Birmingham B249BX, Tel: 021-3776292. Fax: 021-3776645Manufactures a range of assembly loadmonitors to check that the load required toassemble components falls within presetlimits. Also systems to check positionalaccuracy and recording equipment toprovide permanent records of results.For more information enter ME164

PJ Hare LtdWrington, Bristol BS18 7NL. Tel: (0934)862608 Fax: 0934 863126PJ Hare Tooling Division designs andmanufactures tooling for assemblingcomponents by the application of thecontrolled load and ram movementprovided by HARE hydraulic presses. Theassembly operation can incorporategauging and inspection functions includingload monitoring. Customers include Black& Decker, Ford, Delco Products andNissan.For more information enter ME165

EWAB Engineering Ltd nStafford Park 16, Telford, Shropshire TF33BB. Tel: (0952) 290328EWAB Engineering designs, builds andinstalls automated, programmable, flexibleflow conveyor systems for the transportationof parts for automatic or semi-automaticassembly or manufacture. Systems can besupplied from simple, expandable buffer loopfeed conveyors to fully automated conveyorsfor FAS, FMS, CM etc.For more information enter ME166

Harland SimonAutomationSystems LtdTorrington Avenue, Coventry CV4 9XQ.Tel: (0203) 473748. Tlx: 312355. Fax:474196Encompassing John Brown AutomationLtd, the company manufactures andsupplies flexible automation systems,robotic cells, automated assembly machinesand equipment. Controls and software canbe integrated from PLCs to full CIMincluding diagnostics, monitoring andmanagement information systems.Consultancy services include DFMA andfeasibility studies and Materials Handlingsystems can be tailored for a wide range ofindustries.For more information enter ME167

Lanco (UK) LtdWarwick Corner, 42 Warwick Road, Kenil-worth, Warks CV8 1HE. Tel: (0926)851511 Fax: (0926) 513255A subsidiary of LANCO AG, CH-4512Bellach, Switzerland. Manufacturers ofModular Flexible Pallet ConveyorAssembly Systems. More than 10 miles ofturn-key systems already installed. Systemsalso supplied in kit form. Assembliesundertaken range from sub-miniaturemicro-switches, compacts, safety belts,dashboard instruments etc... to items up to40 kg. Typical pallet size is 200 x 200 mm

AC\C\ f>C\C\ mm nn

HFL4001 Rin e ~>1 puk &. pi i n unit ils-»m unit ictuiedFor more inform ition enter Mh 168

LinkAutomation

Limited

Unit 46, Imex Business Park, Flaxley Road,Stechford, Birmingham, B33 9AL.Tel: 021 789 6857 Fax: 021 789 6859Automatic assembly machines to suit awide range of applications are designed andmanufactured by Link Automation. Theseare often based on the Paro flexible freeflow platen system coupled with specialisedwork stations. Extensive experienceenables Link to give prospective users ofautomated assembly systems a rapid"ballpark" cost indicator to gauge theeconomic viability of a specific project. Ourproven technology and experience ensuressatisfactory effective automation.For more information enter ME 169

PJECHATROMCP R O D U C T I O N S Y S T E M S L T D

2267 Coventry Road, Sheldon,Birmingham B26 3PD.Tel: 021-742 7206 Fax: 021-743 6882Mechatronic are a major turn key integratorspecializing in Automatic AssemblySystems. We can supply Manual workstations to Rotary transfer to fullpalletization Power Drive Systems.Combined with close customer liason andProfessional Project Management ourstrength lies in our team of Production,Mechanical and Electrical engineers whichproduce innovative solutions. We have areputation for our commercial integrity andour project successes have earnt asignificant client base.For more information enter ME170

ModularAutomationLimitedTalbot Way, Small Heath Business Park,Birmingham BIO OHJ. Tel: 021-766 7979Specialists in the design, development andbuilding of automatic assembly systems andflexible conveyoring for a wide range ofindustries throughout the world. ModularAutomation's forte is to develop aninnovative, yet simple solution tocustomers' assembly and componenthandling problems and then provide anengineered production system based on amodular concept of proven automationequipment. In addition to turnkey solutions,individual component elements forcustomers' in-house automation projectscan be supplied.For more information enter ME 171

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MANUFACTURING ENGINEER JUNE 1992