Menu
…

Invoice financing

What is invoice financing?

Running a business can be tough. In fact four in ten small companies don’t make it to five years. And one of the main reasons for failure is poor cash flow, which is mostly caused by late payment of invoices1.

Waiting for payments from customers, where terms can be anywhere from 30 to 120 days, can really limit your potential for business growth.

  • Improved cash flow
    Invoice financing can release cash tied up in outstanding invoices by providing the flexibility to raise finance against the value of outstanding invoices. 
  • Save time
    We research the right funding solutions for you, saving you time and effort to concentrate on what you do best – running your business.
  • Flexible solutions
    Our experienced commercial financial advisers research the market, considering as many finance options as possible.

How we can help

Our process is simple: we listen, obtain a clear understanding of your business and then provide solutions. Our expertise crosses all trades and industries and provides finance packages that aim to help your business growth and cash flow. More details on the ways in which can help you are detailed below.

1. www.smallbusiness.co.uk study by Ormsby Street

Confidential invoice discounting

Invoice discounting provides the finance you need by accessing up to 85% of the funds held in your invoices. However, you remain in control of collecting payments against outstanding invoices, so you can still handle your own credit control and sales ledger management. The confidential service means that it won’t be disclosed that you are using an invoice discount facility. Some solutions will also provide you with Bad Debt Protection against customer insolvency. How does it work?

  • Invoice
    Send your invoice to your customers.
  • Receive funding
    An agreed percentage of the invoice will be advanced to you, usually within 48 hours.
  • Customer payment
    Your credit control team chases payment and the remaining percentage is paid to you once your customer pays.

Factoring

Factoring works very much in the same way as invoice discounting, but the provider manages your credit control, chasing and collecting outstanding invoice payments. This can save you additional time and money as it means you don’t need to employ a credit control team. How does it work?

  • Invoice
    Send your invoice to your customers and a copy to the provider.
  • Receive funding
    An agreed percentage of the invoice will be advanced to you, usually within 48 hours.
  • Customer payment
    The provider will chase payment on your behalf and the remaining percentage is paid to you once your customer pays.

Frequently asked questions

Q
Will my customers know that I’m using an invoice financing solution?
A
It can be arranged confidentially, so your customers won’t know that you’re borrowing against their invoices.
Q
Will this affect my credit rating?
A
As this is a form of financing, and there will be fewer unsecured assets available, it may affect your credit rating and your ability to get other funding.
Q
Does it matter what sort of business I run or the industry that I’m in?
A
Invoice finance is most appropriate for businesses in sectors such as temporary recruitment, haulage, manufacturing, engineering, and any industries where payment is made in 30 days or more. It is not suited to businesses whose customers are individual consumers or those who take a deposit.