When Cashflow Partners, the invoice factoring company based in Glasgow, went into receivership earlier this month, it was the first company of its kind to do so in 40 years.

When Cashflow Partners, the invoice factoring company based in Glasgow, went into receivership earlier this month, it was the first company of its kind to do so in 40 years.

Alas, that was not the only rare, and unfortunate event, to befall the company.

Cashflow, which is based in the city's Seaward Place, had between 80 and 85 clients on October 10, when its bankers, Bank of Scotland and Clydesdale, called their debt and Cashflow's directors had to call in the receivers.

Unfortunately, one of those customers, Minutes Medical, of Wellington Street, Glasgow, found itself in credit with the invoicing company - an event even rarer than an invoicing company going into administration.

Richard Dias of Minutes Medical, which has used Cashflow for the past 20 years, believed it had just lost almost £58,000.

However, because of his unique predicament, as of last night the receiver, Kroll Corporate Advisory & Restructuring Group was "minded to look favourably" on Dias, according to sources close to the matter, and there could be news as early as today.

Dias, who is out of the country at present, told The Herald: "Minutes Medical supplies doctors on contract to the NHS, and we have been using Cashflow for the past 20 years without a problem.

"When I heard what had happened I contacted Cashflow, to hear that one of my customers had cleared all their invoices, worth £85,000 as early as early as September 28. Cashflow hung onto cash received. I didn't know it had been received and so couldn't ask for it. Anyway, they should have paid it within five working days.

"When I contacted the receivers, they said I was an unsecured creditor, and would have to wait in line with all the other creditors. I stand to lose the whole lot."

All connected with his position agree: it is highly unusual.

Kate Sharp, chief executive officer of the Asset Based Finance Association, which represents 46,000 invoice factors, handling £173bn in debt every year, described the circumstances as "highly unusual".

Invoice financing is a simple, and usually fool-proof way for mainly small businesses and start-ups to guarantee cash flow. The company collates all its invoices for a month and presents it to the factor, who accepts it as a security, and then pays out to the company a percentage of the total.

The factor then goes on to collect on the invoices, and the difference between what it collects and what it has paid out is its profit. It is a system that should leave the factor's customers always in arrears; ie, with no cash at risk.

Sharp said: "In Mr Dias' case, if he is an unsecured creditor, then the same rules apply to him as anyone else. That is a matter for the receivers to decide. But such an event has not happened in 40 years, and the industry is very concerned to make sure that people do not lose out in this case.

"We have been in close touch with the receivers, who tell us they are dealing with each client one by one, and are endeavouring to pass on Cashflow's book to another invoice factoring firm as quickly as possible."

Indeed, so secure is the system that most banks advising small firms will advise them to use an invoicing factor to ensure cash flow in the initial phase of business growth when most ventures will fail for that reason.

Last night Fraser Gray, one of the receivers, and a partner at Kroll, said: "We are fully aware of Minute Medical's position, and appreciate the concerns that the company has following Cashflow Partners entering receivership. We have maintained an active dialogue with the directors of Minute Medical since our appointment on October 10, and we are currently working with them to find a solution."

However, Dias remains concerned. He said: "Other businesses using factoring should beware. Are more factoring firms and their clients at risk? Other businesses should know they need bad debt insurance against their factoring firm.

"The customer is taking a big risk putting all debt with one organisation. We should be protected automatically by the industry itself in my opinion. They should have insurance or systems to protect the customer.

"Why should I go around begging for my own money?"