Invoice Finance

Maintaining healthy cash flow is key to any business. Invoice finance allows you to access up to 100% of the invoice value straight away. No more waiting 30, 60 or 90 days to get paid. Invoice finance can work for any industry whether you are a new start up or well-established business. An overall facility size will be agreed with you, and you are then free to draw down cash as and when you require to keep your cash flow healthy. The facility is repaid as invoices are paid to your business by your customers.

There are three main types of invoice finance:

Factoring

You finance the entire sales ledger, and your factoring company takes charge of credit control to ensure you are paid in a timely manner. Great for businesses that do not have full-time credit controllers in place.

Read more in our Blog: What is factoring?

Invoice Discounting

Again, you finance your entire ledger, but you carry out credit control. These facilities can sometimes be offered on a confidential basis, meaning your customers do not know you have a factoring facility in place. Great for businesses that have an established and well-run credit control function in place.

Selective Invoice Finance

Rather than financing your entire sales ledger, instead you choose the debtors you want to fund, or sometimes even just individual invoices. Great for companies that have highly concentrated sales ledgers (one or two particularly large debtors), or who only need occasional cash flow boosts rather than constant assistance.

FAQ

What security is required in Invoice Finance?

An Invoice Finance company will typically require a debenture over your business and a personal guarantee. This could be set to a limited amount.

Will my business qualify for Invoice Finance?

Invoice Finance is readily available to most businesses. The main criteria are that you sell on a B2B basis on open credit terms, and your invoice is raised on completion of the work carried out or goods being delivered.

What is an Invoice Finance facility?

An Invoice Finance facility is a cash flow tool used by businesses who invoice for works carried out and services rendered. It allows the business owner to draw down cash against the invoice, rather than having to wait for 30 days+ to get paid.

Is Invoice Finance available for a new business or startup?

Yes, Invoice Finance is available. Whereas a loan company will often need to see established trading history before being able to assess affordability, invoice finance companies can work with you from the very start. As they fund invoices once the work is completed, they can advance funds safe in the knowledge the repayment will be made.

Is Invoice Finance factoring?

Factoring is a form of Invoice Finance. There are several different types of invoice finance. It is best to speak to a broker about which form is invoice finance will be best for your company.

I work in construction – is Invoice Finance available to me?

Yes. Although many invoice finance companies do not offer facilities to construction companies, there are some who have specialise in this. Our job is to make sure you are talking to the right lenders who understand your industry and how you work.

Do I need to insure my debtors when using Invoice Finance?

Not always. If you have a credit insurance policy in place, then this makes it easier to get the funding you require. Some companies will offer bad debt protection as part of their offering and may insist on it being in place. If you have a well spread debtor book, then it may not be required at all.