5 Top Tips for getting Invoice Finance

While each Invoice Finance institution will have their own specific criteria or set of standards in screening and approving clients, there are some things that receive universal approval and will always increase your chances of getting invoice finance. Here we have tried to list what we believe are perhaps 5 Top Tips for getting Invoice Finance.

1. The most important thing is to be as honest and transparent with the factoring company you are dealing with.  They will be doing a background check and will require you to submit certain documents, so there is no use in hiding things.  Be open about past financial problems so they will be able to understand your situation.
2. Provide as much relevant information as you can.  You will be given a list of required documents, these usually include purchase and sales invoices, delivery notes or receipts, as well as a ledger of all debtors and creditors.  Feel free to submit any additional documents that would support or prove ease of collection of the debt.
3. Explain your reason for factoring and how the funds will be utilised.  Another important aspect that you need to show is that the funding would be enough for whatever purpose it will serve and that the business will be running smoothly.
4. From all these documents, the most important of course is the sales invoice.  Poor financials can sometimes be overlooked with a strong debtor ledger.  Make sure that the invoice you are factoring is for a good or service that has already been delivered or rendered, since these kind of invoices are easier to collect or enforce.  So factoring an invoice for a good or service that has yet to be delivered would be quite hard.
5. Last, but not the least is a clean slate on your sales ledger.  This will reflect how easy or how tough it is for the company to collect sales debts from clients.  Make sure that you have collected all overdue debts and issue all credit notes that need to be issued.  Complete information of all your customers, especially those in the factored invoice should also be updated.

These tips cannot guarantee approval, but at least it would paint a good picture on the company's standing sales wise and numbers wise.  Remember a sale is not a sale until it is collected, or in this case factored. If you would like more information on the various options available for Invoice Finance (Invoice discounting, Factoring) or using one of the online Invoice Auctioning platforms, the Choice Loans team is happy to help. Please either call us on 0845 1260350 or complete our Invoice Finance enquiry form here and we will call you.