Fixing rates in invoice finance – a consumer only initiative?


Fixing rates in invoice finance – a consumer only initiative?

August saw an event happen that we have become unaccustomed to - the Bank of England raised the interest rate for only the second time in a decade. It might only have been a quarter of a percentage point, from 0.5% to 0.75% but it’s the highest level since March 2009.

The decision means that businesses will experience an increase in lending costs which might at this point have limited financial impact, however, the suggestion by Mark Carney that there would be further "gradual" and "limited" rate rises to come, means uncertain times for UK business.  It also risks undermining confidence at a time of significant political and economic uncertainty.

The country needs its SME population to invest in business growth if we are to see continued economic success and funders must raise their game to continue supporting them through uncertain times.

A desirable scenario for UK business is if they could take more control over the cost of funding so that they can plan effectively.  If we look at consumer finance, there are many examples where the banking system gives control back to the borrower.  For example, when we purchase a house or a commercial property – the largest asset many of us will own – we shop around to fix our rate for 2 years or more.  Fixing rates gives a borrower more control over their costs to help them manage their finances over a period of time or through unpredictable times. It can boost confidence levels resulting in an increase in investment projects. 

At Pulse Cashflow, we recognised this a few years ago and working with our clients we introduced our industry leading single fixed fee.  Our objective was to ensure that our clients remain in control of the cost of funding facilities and be able to more accurately predict costs moving forward. 

Our industry can sometimes be plagued by hidden costs or surprises when it comes to how much our funding facilities cost.  These additional costs are not presented in a transparent way when we are onboarding clients.  Whether it is a fee for a same day payment or any facility variation.  Our single fixed fee was designed to remove this scenario.  There are no additional costs added so our clients can rest assured there will be no hidden surprises.

We know our clients appreciate the benefits our single fixed fee provides them.  As a result, clients do not need to be concerned about rising interest rates as they suffer no impact from base rate increases - not now but also for any further predicted base rate rises.

As Jason Horn of Alton Pumps says “Pulse Cashflow’s single fixed fee is great.  The transparency that it provides is really beneficial to us.  We are able to project forward the cost of our funding much more easily and enables us to determine what investment projects to initiate.  It has certainly contributed to the success and growth of our business”.

Why not future-proof your clients’ cost of funding by switching their funding facility to Pulse Cashflow today.  Call us today on 01256 976000 to experience finance the way it should be.

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About Us

Pulse Cashflow are a leading independent funder specialising in invoice finance who work with businesses experiencing a range of cashflow challenges.