‘The devil is in the detail’ – a very appropriate comment when it comes to appraising an Invoice Discounting deal.
It is very common for a business to enter into a contract (with a provider of invoice discounting) in a hurry, without previous knowledge of the product and possibly feeling under some pressure to use the lender which is owned by their bank.
It is then also common for them to decide that they like the product, but wish that they could have their time over again when it comes to negotiating the terms or deciding upon which lender they went with.
Lenders tend to be large providers (typically those owned by the banks) or smaller, independent businesses, sometimes privately funded. It is therefore inevitable that they will have different levels of service, different ‘cost of funds’ (which translates into pricing variation) and with varying appetite to put together bespoke packages. Many have also developed ‘niches’ and specialise in different sectors.
Well you can ‘have your time over again’, because invoice discounting deals have renewal dates (albeit sometimes rolling renewals) and that should be your opportunity to undertake a market analysis and see what is out there in terms of competitive packages, terms and pricing.
This is a competitive market and worth researching properly.