Invoice Finance & How it works

What is invoice finance?

Invoice finance releases up to 90% of an invoice's value within 24 hours to avoid the delays in getting paid commonly experienced with trading on credit, thus helping improve cash flow to provide the necessary working capital for businesses to focus on their day-to-day tasks.
Also known as accounts receivable finance, invoice finance is the umbrella term for factoring and invoice discounting solutions that can be tailored to suit a company’s individual cash flow requirements. In addition, invoice finance can be incorporated into solutions such as asset based lending, international finance and payroll solutions.

What are the benefits of invoice finance?

  • Invoice finance is more flexible than more traditional finance for business as the cash you can access grows in line with your sales ledger.
  • By boosting your cash flow in just 24 hours, invoice finance allows you to bridge the cash flow gap between paying suppliers and receiving payment from your customers.
  • Invoice finance enables your business to negotiate supplier discounts.
  • Credit control can be built into the factoring invoice finance solution to reduce in-house overheads and improve your business’ sales ledger management.
  • Credit protection can be added to either the factoring or invoice discounting invoice finance solutions to protect against debtor insolvency or protracted default.
  • Invoice finance can be used to help fund acquisitions or mergers.
  • Unlike a bank overdraft, invoice finance solutions cannot be recalled on demand.

Which invoice finance solution best suits my business?

Invoice finance solutions can be tailored to suit the individual cash flow requirements of businesses across most sectors. With over 20 invoice finance companies across the UK and Europe from high street lenders to independent finance houses, speaking to a specialist invoice finance broker will help to save time and money when searching for the right facility to help improve cash flow.

Invoice Finance - what is right for you?

At first glance, the whole idea of invoice financing can seem a little bit confusing. And when you're then told that "invoice finance" is actually an umbrella term, you may begin to wonder what you're letting yourself in for. Don't. We're not here to bamboozle or confuse. We're here to guide you towards the most suitable financial solution.

Remember, this is only a guide. There's a pretty good chance that you'll recognise your business and your needs in the description of these services, but if you're not sure, feel free to contact us.

We consider every business on its merits and on its own terms. However, there are a few initial criteria we must insist upon. If you're interested in invoice discounting or factoring, then we typically look for strong proof of debt - usually in the form of delivery notes or timesheets. Importantly, you must sell to other businesses - not consumers - and you must invoice those businesses. If you get paid immediately or in cash, then invoice finance is not the solution you need.

Take a look at the chart below to compare the various invoice finance options available.

  Factoring Invoice discounting Asset based lending
Who is it for? Businesses looking to outsource all invoicing Larger businesses with sound administration Businesses with cash tied up in physical assets
Cash injection of up to 85% of the value of your unpaid invoices (balance, less our service charge, paid later)
Unlock the cash value of inventory, capital equipment and other assets
Anonymous? your clients don't need to know you're using the service
We collect payments for you - full sales ledger service
Funding grows with your business
Funding exports
Protection from bad debts