Invoice Finance

Managing cash flow is essential to the success of any business. If you issue invoices for goods or services to other businesses and find yourself waiting to be paid or managing late payments, Invoice Finance can offer many benefits to businesses.

If any of these situations sound familiar, invoice finance could give your business the cash flow injection it needs. By releasing cash against your outstanding customer invoices before they’ve been paid you can manage your cash flow, and your business, more effectively.

There are two types of invoice finance products: Factoring and Invoice Discounting. The biggest difference between them being who collects your customer payments. Each allows you to release a large proportion of an invoice’s value within
24 hours of its issue. Then, once your customer has made their payment, the remaining balance is paid to you, minus any fees.

There are many reasons businesses are increasingly turning to invoice finance.

Boost your cash flow without the need for debt

Because invoice finance is not a loan, you’re not taking on any debt. This keeps your cash flow healthy.

More time and resource to focus on your business

If you choose factoring, you get a dedicated credit control service, allowing you to focus your time and energy on

your business.

Minimise late payment and bad debt

To safeguard your business, you can choose to add bad debt protection. This is known

as non-recourse factoring, where the Factoring company takes on your bad debt risk, unlike

recourse factoring, where the risk of not being paid by your customers remains with you.

Realise opportunities

With an improvement in cash flow you’ll be in a better position to realise

new opportunities, take on new orders or expand and invest in your business.

Take advantage of discounts from suppliers

You will be able to take advantage of volume discounting deals with your own suppliers as you will be in a position to buy larger units or to take advantage of supplier discounts for early payment.

Get to know your customers better

You can get useful information about the credit standing of your customers, which can help you to negotiate better terms with your suppliers. It also means you can take on better quality customers and improve your debt position between more customers instead of concentrated in just a few.

Factoring services are ideal for businesses that face cash flow challenges and want factoring companies to manage collections from their customers. It can bridge the gap between raising customer invoices and getting paid. At the same time, it can free up your time because your invoicing and debt collection processes are being managed for you, unlike Invoice Discounting where you manage it yourself

Factoring - how it can work for your business

Your business could be suitable to use Factoring if you:

Provide goods and/or services to other businesses
Issue your customers with credit terms of between 30 and 90 days
Want the Factoring company to manage your credit control

Features

Release up to 100% of your invoice value within 24 hours giving you immediate access to cash to meet payments or make important purchases
You get cash against the value of your invoices as they are raised
The cash you can access grows in line with your sales
Your credit control and sales ledger is managed by the Factoring company saving you time.
The Factoring Company liaises with your customers for payment
You can add optional Bad Debt Protection
With most Factoring companies you can manage your account at any time on online.

The process can be confidential if you are looking for more of a discrete service

If you do not want your customers to know how you’re funded or if you have reliable collection practices in place and would prefer to keep your credit control function in-house, most factoring companies can offer a confidential service.

This means that the factoring lender does not tell your customers that you are using a finance facility and you maintain the relationship with your customers, without their knowledge of the factoring lender’s involvement.

When it comes to your customers paying their invoices and to keep the process confidential, your customers make payments into a trust bank account in your name even though the funds are paid directly to the factoring Lender.

Factoring

Invoice Discounting - how it can work for your business

If you find yourself waiting to be paid for the work you’ve done or need additional cash to help with your growth plans, then Invoice Discounting can be one way to help you manage your cashflow and focus on developing your business.

It is ideal for businesses who face cash flow challenges or want to finance their growth. It can fill the gap between raising customer invoices and getting paid, releasing cash that can help you manage your business's day-to-day activities or fund its growth.

It also means that you continue to manage your sales ledger, credit control and collecting payments from your customers, unlike Factoring where this process is managed for you.

Your business could be suitable to use Invoice Discounting if you:

provide goods and/or services to other businesses
issue your customers with credit terms of between 30 and 90 days
have strong credit management and control reporting tools
can demonstrate a capable management team
have been financially viable for a minimum of six months
prefer to manage your credit control

Features

Release up to 100% of invoice value within 24 hours giving you immediate access to cash to meet payments or make important purchases
You get cash against the value of your invoices as they are raised
The cash you can access grows in line with your sales
12 and 24 month contracts or a flexible 30-day notice rolling contract
you keep the relationship with your customer by managing your own credit control and sales ledger
Confidential process
you have the option to protect against customer insolvency with Bad Debt Protection
With most Factoring companies you can manage your account at any time on online.

Invoice Discounting

Bad Debt Protection - how it can work for your business

Protecting your business if your customer can’t pay.

If you have had previous experience of customer bad debt and want to minimise the risk of non-payment from customers, you can protect your finances from non-payment with Bad Debt Protection, also known as non-recourse.

Bad Debt Protection protects your business against the impact of a customer insolvency or non-payment. It is available as an option with most Invoice Finance products.

A Bad Debt Protected limit is provided for each of your customers
You can protect the whole of your sales ledger or choose selected customers
Provides reassurance, knowing you’ll receive payment and safeguard your cash flow if your customers are unable to make payment or become insolvent.
Protects up to 90% of your bad debts
Bad Debt Protection can cover both UK and Export customers
There is no lengthy claim process