"The banking and finance sector is a significant contributor to the UK economy. The industry’s trade surplus is vital, and we are keen to work with the government and regulators to increase these benefits for the UK." David Postings CE UK Finance
UK Finance has set out proposals to place the financial services industry at the heart of the UK's post-Covid-19 economic recovery, with an ambitious strategy to boost UK exports of financial services.
In a report published 27 Feb 2021, UK Finance has provided a detailed analysis of international trade in financial services, the tools that can be used to promote it and the benefits it brings for businesses and consumers.
The UK is the world’s top net exporter of financial services, above the United States and Switzerland, with a financial services trade surplus of $77 billion (equivalent to £60.3 billion) in 2019. The banking and finance industry currently employs over one million people across the United Kingdom, with over two-thirds of these jobs located outside of London.
The report identifies seven recommendations for the UK government and regulators to build on these strengths and promote international trade in banking, payments and other related services. These changes would not only benefit the financial services sector but would boost the economy as a whole, by generating jobs across the country, lowering costs for consumers and helping firms in other sectors expand into overseas markets.
The report, International Trade in Financial Services, calls for a comprehensive strategy on “regulatory diplomacy”, in which UK financial regulators such as the Bank of England and Financial Conduct Authority work with their counterparts in other countries towards improved market access. The aim of this would be to encourage other countries to open their domestic markets to UK-based financial services providers and promote cooperation in innovative areas such as AI, cybersecurity and fintech.
The report also proposes that the UK should use its position at key international bodies like the Financial Stability Board (FSB) and Basel Committee to push for global convergence in financial standards, making it easier for firms to operate across different countries. In addition, the UK should champion initiatives at the World Trade Organisation to support global free trade in services, while using new trade agreements to unlock market access for financial services in key markets such as Japan and the United States.
Invoice finance from specialist single invoice finance provider, Cash for Invoices Limited can play a part in financing UK SMEs. Single invoice finance is more flexible than conventional invoice finance.
Permjit Singh of Cash for Invoices Limited explains what invoice finance is:
Cash for Invoices Limited - the single invoice finance specialist of London, explains how single invoice finance works:
Cash for Invoices Limited of Chiswick London is an invoice finance company that specialises in buying single invoices off an SME in exchange for upfront cash. Unlike other providers,
Cash for Invoices Limited only charges ONE fee, and gives the SME these other benefits:
NO commitment on you to sell further invoices NO arrangement fee NO facility NO security charges NO debt
Cash for Invoices Limited of London offers a simple, transparent and flexible invoice finance service that helps the SME or sole trader get the essential cash they need.
What is an invoice?
Invoices are a form of trade receivable, i.e., they are an asset on a company's balance sheet representing money to be received by that company at some future date - at the time the debtor pays the invoice. At that time, the debtor (payer of the invoice) will no longer appear on the company's balance sheet and instead it will be replaced by an equal amount of cash (which is also an asset). There is no net increase or decrease in assets, merely conversion from one to another.
If that debtor does not pay, then the asset will be written off as a bad debt (a cost in the profit & loss account) and assets will then reduce (no cash came in). Granting time (credit) to buyers to pay for their purchases is therefore an example of credit risk for the company giving time.
If later - perhaps through credit collection procedures - the debtor pays the invoice, then the bad debt is added to the p&l as a profit (income) and cash increased by the amount received. The assets increase and are offset by an increase in profit (equity on the balance sheet). All is well again.
Selling an invoice to Cash for Invoices Limited
Before the debtor defaults, the company can sell the invoice to a company such as Cash for Invoices Limited that will offer to buy just one invoice when the company wants to sell. There is no commitment for the company to sell, and no commitment for Cash for Invoices Limited to buy. The company wants to exchange an invoice for cash - perhaps it needs the cash sooner than the invoice payment date.
Cash for Invoices Limited will make an offer after conducting due diligence on the selling company and on the debtor especially. The debtor is a key concern for Cash for Invoices Limited because if there is a subsequent default then Cash for Invoices Limited will not require the seller to buyback the invoice. The sale is therefore non-recourse and Cash for Invoices Limited has to suffer the consequences of a default. It will commence steps to recover the debt. These can include issuing letters for payment, appointing a solicitor, making a court claim, or making a claim under a credit insurance policy.
Retention to mitigate credit risk
To mitigate the potential costs of trying to recover payment on an invoice that Cash for Invoices Limited purchased but which goes into default, Cash for Invoices Limited will retain up to 10% of the value of that invoice from the purchase price. If there is no default (the debtor pays the invoice on time and in full) then Cash for Invoices Limited will pay the retention to the seller when the debtor pays the invoice.
Features of single invoice finance offered by Cash for Invoices Limited
In addition to being non-recourse, Cash for Invoices Limited does not require a commitment from the seller to sell all its invoices, nor will Cash for Invoices Limited charge an arrangement fee for a purchase. Cash for Invoices Limited will not ask for ongoing fees because there is no facility between the seller and Cash for Invoices Limited. The transaction is entered into whenever the company needs cash and Cash for Invoices Limited agrees to purchase the single invoice or multiple invoices. Compared to bank factoring facilities, Cash for Invoices Limited's single invoice finance service is far more simple and has no tie-ins and far fewer fees, just one.
Cash for Invoices Limited's single invoice finance service therefore helps companies (sole traders and SMEs) who need cash.
To find out more about Cash for Invoices Limited's single invoice finance service contact Cash for Invoices Limited . Cash for Invoices Limited will consider businesses and debtors located in Ealing, Hounslow, Hammersmith, Richmond, Kingston, Harrow, Acton, Brentford, Chelsea, Kensington, Holland Park, Barnet, and the north, south, centre, and east of London.