Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What are the competitive fee structures and terms offered by different invoice discounting providers?
Invoice discounting fees vary significantly by provider and can often be negotiated. Here's what members have encountered: **Fee structures typically comprise two components:** - A service fee (usually 0.2–0.25% of the available facility) - A discount margin over base rate (typically 1.75–2.25%) **Specific provider quotes members shared:** - **Lloyds** — 0.2% service fee + 2.25% discount over base rate (with potential to negotiate the service fee lower) - **NatWest** (historical, several years ago) — ~1.75% margin over base + 0.25% facility fee, though the facility fee was negotiated down to a fixed amount and the bad-debt protection element was removed when the member used a separate credit insurer - **Aldermore** — members have used this at scale (seven figures annually) and found the fees "not uncomfortable" relative to cashflow benefits, though one member noted a competing **Credit Agricole** quote at 50% less than Aldermore's pricing **Negotiation tactics:** - Service fees are negotiable; members have successfully argued for lower or fixed fees by demonstrating that the full facility isn't needed year-round (e.g., only at peak seasonal periods) - Bundled bad-debt protection can be expensive; consider using a separate credit insurer and removing that fee element - Fees are heavily dependent on business profile and turnover; direct comparison between providers requires understanding your specific circumstances **Key caveat:** One member emphasized that while percentage-based fees might seem high in abstract terms, the cashflow benefit often justifies the cost for growing businesses.
Is it standard practice for invoice finance providers to charge factoring fees on credit notes, and should members be paying multiple fees on related invoices?
No — charging factoring fees on credit notes is not standard practice and members should push back on this. One member reported being charged 1.6% factoring fees on three separate items: the original invoice, a credit note cancelling it, and a replacement invoice for redelivered goods after a recall. This resulted in an effective fee of 5% — well above the typical single charge. When questioned in the community, the response was direct: this practice is not normal. Members should clarify with their invoice finance provider whether fees should only apply to invoices actually advancing funds, not to administrative credit notes. If your provider is charging multiple fees on related transactions, it may be worth negotiating the terms or exploring alternative providers.