What is Invoice Finance?
Invoice financing is a way for your business to borrow money against the amounts due from customers. This allows you to receive most of the cash from your invoice value as soon as your invoice is raised. It is an excellent way to release cash back into your business for growth, or whatever purpose suits your business. It takes the pressure off chasing your debtors and can give you peace of mind.
Who Needs Invoice Financing?
Customers taking too long to pay? Turning down jobs because there’s not enough cash to fulfil the job? Or even if you’ve turned down a contract because the payment terms were too long? Whatever your reasons, invoice finance can be the solution for you.
The Benefits of Invoice Finance
How Does Invoice Finance Work?
If you would like to learn more about invoice finance, then get in touch with our specialist team.
Helping Businesses Unlock Cash Flow
Waiting weeks or months for customers to pay can place unnecessary pressure on your business. Invoice finance allows you to release cash tied up in unpaid invoices, giving you faster access to working capital without waiting for payment terms to end.
Many businesses use invoice finance to:
With funding available against your outstanding invoices, your business can continue growing while maintaining a healthy cash flow.
Types of Invoice Finance
Invoice discounting
Invoice discounting provides a discreet way to access cashflow finance solutions, offering an injection of cash into a business by releasing money against unpaid sales invoices.
Up to 90% of the invoice is made available within 24 hours of it being raised. The remaining balance is made available when customers settle their outstanding invoices, minus a collection fee.
Invoice factoring
Invoice factoring is a type of business finance that allows companies to unlock the cash tied up in unpaid invoices. Instead of waiting for customers to pay, a business can sell its outstanding invoices to a finance provider in exchange for an immediate cash advance, typically worth up to 90% of the invoice value. Once the customer pays the invoice, the remaining balance is released to the business, minus the provider’s fees.
It’s useful to help improve cash flow, cover day-to-day expenses, and provide working capital for growth, making it a popular option for businesses that regularly invoice customers on credit terms.
Invoice Factoring vs Invoice Discounting
| Invoice Factoring | Invoice Discounting |
|---|---|
| Credit control included | You keep credit control |
| Customers know | Confidential |
| Ideal for smaller businesses | Often suited to established businesses |
| Less administration | Greater control |
Other products you may be interested in
We offer a range of business financing solutions to meet the needs of various industries. Backed with decades of banking and finance experience, our team works with thousands of companies throughout the UK. We help them optimise cashflow and achieve their goals through a range of business finance solutions, including:
Contract Hire
Contract hire is a cost-effective business finance service for companies that require support with vehicle leasing. Offering the use of new cars or commercial vehicles without the headaches of ownership, this business financing option is a great way to manage your fleet without the risks of depreciation.
FAQs About Invoice Finance
Are you a Supplier looking for finance for your customers?
If you sell any form of equipment, machinery or commercial vehicles, why not offer point of sale finance to your customers? You can make supplier finance arrangements through any one of our group businesses, where local knowledge is backed by national support.
