There comes a time in every relationship when you have to consider whether or not you’re getting out of it as much as you should be. Of course, for some this could be years down the road, for others it’s tomorrow morning.
It has to be said this a whole lot easier with a broker involved, but whether not you involve us is up to you.
Before we go any further, let’s just make sure you actually want to move supplier. If your business has changed, or maybe your provider has changed the way the work then fine, you possibly will need to move provider, as they won’t be able to offer the service you need.
If on the other hand it because of costs, or maybe there are niggling issues with the way they handled some things, then it may better to have a mediation session, to look at the situation and how it’s been handled to see if there are things that can be resolved between you. This is usually a lot easier than moving supplier completely.
If you need help with a mediation session then we will be more than willing to help, and if you are an existing client of ours then it is free.
Moving finance providers isn’t that difficult (despite what your current supplier says), but there are a few things to be careful of:
- Contract terms.
Are you looking to be factor free? In plain English do you want to give up this whole factoring service for a new life.
If you are contract period has finished, there is simply a notice period (normally 3 months) to get over and you can move off into your bright new world.
If you are still in contract then you will have a settlement to consider for the ending of the agreement, this will depend on the terms of your agreement and it’s subject to negotiation with your provider.
If you are looking for a new finance company, then it is possible to broker a deal where they will ‘buy out’ the agreement. In other words they will settle up what’s outstanding with your previous supplier, so there is no waiting around. So it doesn’t matter if your contract has finished or not.
- Why are you moving
The biggest mistake we see businesses make is moving because of a new ‘special offer’. You have to tread very carefully with these, most of the time your are losing out on a vital piece of service that you actually need, all for a few pounds every month.
You may worth considering taking the offer to your current supplier (or us if you like) and negotiating a better deal on your existing contract, making sure your vital services all stay in tact.
- Be realistic about what will happen next
If you have gone direct to a lender then it is tempting to believe all the hype a new provider may promise, they can be very persuasive. Have a look at what they are saying and whether or not it is realistic. The question we always ask ourselves is would we do it as a business, the provider must be gaining something from this offer. A few years ago one particular provider was offering all sorts of impractical offers, just before they went into administration. Needless to say lots of their clients were very upset by the lack of fulfilment that followed.
- Planning your move
OK so you’ve decided, this is it you’re leaving them, But then what? If you’re leaving to go factor free then you will want to make sure you have some reserves in the bank as your cash flow will go back to be on a 30, 60 or even 90 day payment cycle. Plan your finances carefully, make sure you aren’t out of pocket and you will have the cash flow to support you and the business during the transition period.
- Discussing it with your current provider
At some point in time you will need to talk to your current provider about your intentions. This really doesn’t need to be as intimidating as it sounds, they are quite used to clients moving to new providers for a variety of reasons, the key points are to let them know why and to ensure you remain focused on that. It is likely that will make all sorts of offers after you have let them know, but if you have really decided to leave for genuine reasons then it is better that you stick to that, after all this is for the best for your business.
Leaving a provider doesn’t need to be that difficult, in essence you need to make sure that:
- If you are in contract, you need will need to make arrangements for a settlement of any outstanding fees due (for the remainder period of the contract)
- If you are out of contract you have given them sufficient notice
- You have decided why you are leaving them
- You have a realistic idea of how business will run after you have left
- You have planned your cash flow
- You have discussed it with your current provider
If you need help or advice on any of this the new do offer a confidential services for this very reason. We won’t tell your current factoring provider what is happened, until you are happy for us to do so.