Business financing simplified

Invoice Finance

Business financing simplified

What Is Invoice Financing?

Historically seen as the lending of last resort, alas, no more. Invoice finance has evolved into a fast, flexible, and sophisticated way of leveraging future cashflows for growing businesses. 

Invoice finance allows businesses to release the cash tied up in unpaid invoices. If you are a business that struggles with cash flow issues, invoice finance is one of the best methods to ensure that you get your invoices paid faster. 

In simple terms: rather than waiting days or weeks for invoices that you are owed by customers, invoice finance gets you the cash immediately so you don’t have to wait to get paid.

Some of our lenders

Invoice Discounting

Invoice Factoring

Selective Invoice Finance

Types of Invoice Finance

Invoice Discounting

Your invoice discounting provider will make funds available as a percentage (normally 75-90%) of your outstanding (and eligible) sales ledger. Once your client pays, the remaining balance of the invoice is available for you to withdraw. Invoice discounting can be done on a disclosed (your debtors know you have a financier) or confidential basis.

Invoice Factoring

Factoring is the old school of invoice finance. The lender will make funds available to drawdown against your entire sales ledger. Unlike Invoice discounting, the lender is closely involved with the collection of your debts. The lender will monitor your ledger closely and provide credit control to ensure customers pay on time.

Selective Invoice Financing

Probably the most flexible (and as such, costly) of the invoice finance products. Selective invoice finance does not involve an agreement over the entire sales ledger, rather, over a selection of invoices. This means that the borrower can choose which invoices to advance against. This means you keep control and have flexibility to adjust your cash flow when you needed.

How Does It Work?

A working example of how this can impact your cash flows; if you provide temporary workers to the council, it is likely that your workers need to be paid every Friday, and equally likely that the council pays you monthly in arrears. Clearly, you are going to have negative cash flow.

Invoice finance providers will allow you to draw down up to 90% of the weekly invoices upfront, meaning that you can afford to pay your workers each Friday.

The Benefits

Credit Control

Factoring (but not invoice discounting) facilities often take care of the credit control function, removing the hassle for the business. This can reduce your costs and allow you to concentrate on what you do best, i.e. running your business.

BENEFITS

Cash Flow

This is an obvious one, but, being able to draw down cash from unpaid invoices clearly will ensure that your cash flow is in a more positive position than having to wait 30/60/90 (or more) days for payment.

BENEFITS

Flexibility

Unlike loans, you can flex the amount you draw up and down. All of the major invoice finance providers have got different ways of making the facility as flexible as possible for the borrower, and the facilities can often be tailored for specific needs.

BENEFITS

Speed

Funding is available quickly, once the arrangement is in place. Applying for invoice finance can also be a relatively simple process given the quantum involved.

BENEFITS

Blogs

Qualifing questions

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Get Invoice Finance

Please pop your details in the form below and we’ll get back to you within 24 hours.

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