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What is Invoice Finance?

Invoice Finance is a funding solution that enables you to free the cashflow tied up in unpaid invoices. You can receive an initial payment up front, (typically 90% of the gross value of the invoice, up to 100% in some cases) and the remainder when your customer pays the invoice to the Invoice Finance provider – less the service fee.

How does it work?

The process is quite simple and allows you to get the funding you need ensuring you can concentrate on running and growing your business.

1

Invoice your customer as normal

2

Upload your invoice to your funder

3

You will be advanced up to 90% of the invoice value immediately

4

Your customer pays the lender

5

You receive the remaining amount back, minus the service fee

How much will it cost?

The cost of an invoice finance facility can vary, due to the turnover of your business, the nature of your business or the nature of your sales ledger. We have access to all the major players in the industry, to ensure that we can get the best and most competitive facility for your business. An Invoice Finance facility will typically cost between 1-3% of your invoice value. 

Who is it for?

Invoice Finance is a funding solution for UK registered businesses trading on credit terms on a business-to-business basis. Invoice Finance is used by companies from a wide range of different industries. It can be used by new-start businesses to those who have been trading for years. It can be used by companies looking to grow their business, those who are looking to make their day to day life easier as well as those looking to turn their business round and return to profitability. It could also be used to help fund an Acquisition, MBO or MBI too. 

What are the benefits of using Invoice Finance?

There are numerous advantages of using an invoice finance facility.

  • Improves cash flow

  • Greater flexibility to the business

  • Helps grow your business and take on new customers/order

  • Allows you to pay suppliers quicker

  • Allows you to negotiate better rates with suppliers and customers alike

  • Gives you more time to concentrate on running your business

  • Provides greater security to your business

What is the difference between Invoice Factoring and Invoice Discounting?

Invoice Factoring is where you receive the cash flow solution, but outsource the credit control to the funder. Invoice Discounting means that you receive the cash flow only, and you maintain the credit control functionality yourself. 

Can a new-start company use Invoice Finance?

Yes, absolutely! Invoice Finance is used by new-start companies and those who are a lot more well-established. Invoice Finance is a great tool for new start business to grow from day one.

Why use Invoice Finance and not a loan?

A loan allows your business to receive a sum of money in one transaction, with you having to make regular capital and repay interest payments. If you do not keep up with these, you can default on a loan.

 

Invoice Finance is better suited for regular cash flow as it allows you to constantly inject funding into the business. You cannot fall behind on your payments, as you are only using money that is eventually going to be paid by your customers. If your customers decide not to pay, there are insurances in place to make sure you and your business are protected.

 

In addition, a loan will sit on your balance sheet. An Invoice Finance facility will not.

Why use a specialist broker?

Using a specialist broker like ourselves saves you time and money, as we take the time to understand your business and find the right solution for you. We have access and relationships with the funders so that we can ensure you are speaking to the right people and get the best deal that is available for your business.

 

Our expertise is in Invoice Finance so we can explain all the terminology for you and make sure it is easy to understand, as well as making sure that you get the right facility for your requirements. Getting funding for your business can be confusing and time-consuming – it is our job to make sure that it is neither of those things. 

How much is it to use your services?

Nothing! Our services are completely free. We get paid by the lender on successfully getting you a facility. We do not charge you. 

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