What is Invoice Finance?

Invoice Finance works by unlocking funds tied up in invoices for goods or services sold on credit terms.
The key advantage is that you no longer need to wait for your customers to make payments before accessing the cash. This immediate access to funds offers valuable working capital that can be utilised for timely payments eliminating the need to delay crucial financial transactions until your clients settle their invoices.
  • Key Eligibility Criteria:
  • Min £100k turnover
  • The business is a limited company
  • Minimum 14-day payment terms
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Benefits at a glance

Risk Mitigation

Invoice Finance offers businesses enhanced cashflow, minimised risk of bad debts, and augmented working capital.

Optimising Working Capital

By selling outstanding invoices to a finance provider, businesses in the UK can access a portion of the invoice amount upfront, freeing up resources to focus on other areas of their operations.

Operational Efficiency

Outsourcing credit control and debt collection to a finance provider can help reduce the risk of bad debts and provide a valuable source of funding and financial management support for businesses.

  • Most common industries:
  • Consultants
  • Manufacturers
  • Exporters & Importers
  • Service Providers
  • Marketing Agencies
  • Subcontractors
  • Construction

Types of Invoice Finance

There are various types of Invoice Finance, known by different names. These encompass invoice factoring, invoice discounting, debt factoring, accounts receivable factoring, CHOCC’s (client handles own collections), selective invoice discounting, and spot factoring. Despite the varied terminology, the underlying principle remains consistent. The outcome is accelerated payment and increased availability of working capital.
Here is an example of how Invoice Financing operates:

    1. You issue an invoice to your customer, allowing 30 days credit.
    2. Your Invoice Finance provider promptly disburses around 90% of
      the invoice value.
    3. After 30 days, your customer settles the invoice in full.
    4. The Invoice Finance provider then transfers the remaining amount to you, deducting their fees and interest.

It is not uncommon for credit terms to extend up to 120 days. Invoice Finance proves instrumental in furnishing the necessary funds to bridge this gap efficiently.

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