Invoice Finance
The Top Benefits of Invoice Financing
Invoice financing is a flexible funding solution that allows businesses
Business financing simplified
Invoice Factoring
in a nutshell
Factoring is an invoice finance product whereby the borrower sells their invoices to the factoring lender in exchange for upfront cash. With factoring, the finance company makes available usually between 70 & 85% of the invoice value, and then also gets involved in the collection of the debt. The lender tends to be involved in managing the sales ledger and also managing the credit control.
Compared to Invoice Discounting, the lender is much more involved with the business in factoring – they will ‘mirror the ledger’ and the borrower will need to re-divert customer payments to the lender’s trust account, and introduce a credit collection agent at the lender, who will collect the debt on your behalf.
Security required depends on the lender but most likely lenders will need an all assets debenture plus there is likely to also be some sort of guarantee, either a personal guarantee or a form of anti-fraud indemnity.
Some of our lenders
Working Capital
By effectively making your outstanding invoices get paid on the day they are raised, businesses get an enormous working capital boost.
Credit Control
If you suffer with poor credit control, the factoring company will be a breath of fresh air, they will collect your debts on your behalf, often significantly lowering the levels of overdue invoices on a sales ledger.
Payment terms
By working with a factoring company, businesses previously who have had to cede margins or even decline business based on payment terms, now have the ability to work with these types of customer.
Businesses of all sizes
Because factoring companies work so closely with the borrower and they are able to validate invoices directly, even start up businesses can get factoring.
