Invoice Finance

Invoice Finance

Invoice Finance in simple terms is a finance facility that allows business owners to leverage against their unpaid invoices, allowing you to put a percentage of the cash in the bank instantly (up to 95% of the invoice value). On payment from the invoiced client, the provider will release the other percentage less fees. There are a few types of invoice finance to consider, feel free to get in touch (tab) to have a no obligation call with one of our expert brokers who will walk you through your options.

Invoice Factoring

Factoring is generally the most common type of IF. Its particularly useful to new start businesses as it not only allows your to advance you cash, but the finance company handle collections. In tern, its less work for you in the accounts department so you can focus on the growth of your business. That being said, it’s always worth bearing in mind that a bank might not handle your customers like you and customer collections can be a touchy matter, but it does take a huge element of risk away from the directors of new companies when they utilise a factoring facility.

Invoice Discounting

Discounting is again where a lender will advance your debtor ledger, but instead it is your responsibility to chase payment of the invoices, so your customers will never know you use the facility. It is often less disruptive to businesses as it allows you to maintain a close client relationship. Typically, this type is used by more established businesses with more established clients who have good credit.

Selective Invoice Financing

This method of IF allows you to hand pick your customers who you want to take advance on the invoice, instead of doing the entire sales ledger. Typically, its more beneficial to leverage against larger invoices with your bigger clients, opposed to small invoices as this will mean better cashflow. This is again largely based on your customers creditworthiness and you will need to make collections.

Spot Factoring

Instead of selecting specific customers, you simply select and submit the specific invoices, so for example if there is a large invoice with a new start business and your normal customers are small invoices with big businesses, you would utilise this method here. This method gives you the most control and the lender will deal with collections and because of this, its typically the method with the highest fees.

Get A Finance Quote Today