The benefits of Invoice Trading for your business

Invoice Trading is a relatively new way businesses can raise finance from outstanding invoices. It marries the best of Invoice Discounting (the lower costs) with Factoring (the flexibility to select individual invoice) to give companies greater control over heir cash flow. Let's see how it compares with more traditional forms of invoice finance. The types of Invoice Finance are as follows;

• Invoice Discounting
• Invoice Factoring
• Spot Factoring
• Invoice Trading 

What are they? Invoice discounting allows you to sell all of your invoices to finance provider who in return advances you an agrees percentage of those invoices and you manage the payment. Factoring allows you to sell selected invoices to a finance provider who in return advances you an agrees percentage of those invoices and they manage the collection of payment. Spot factoring allows you to sell a single invoice to a finance provider who in return advances you an agrees percentage of those invoices and you manage the payment. With Invoice trading you can auction just the invoices that you want to invoice and investors compete to fund your invoice, thus driving down your cost of finance, you manage to collection of payment. Who is it for? Invoice discounting is for businesses with an minimum annual turnover of £500k who need to access money tied up in their invoices. Invoice Factoring is for businesses with an minimum annual turnover of £500k who need to access money tied up in their invoices and who want to out source payment collection. Spot Factoring is for business who want to access cash in particular individual invoices. Invoice trading is for start ups, mature and fast growth companies, that want access to money in some of their invoices. How much credit is available? Invoice discounting is typically up 70% of all of your invoices. Invoice factoring is typically up to 70% of all of your invoices. Spot factoring is typically up to 70% of your chosen invoices. Invoice trading is anywhere up to 90%, but within this is supply chain financing where you could get up to 100% finance on your chosen invoices. Will my clients know that I am using the service? Invoice Discounting can be confidential or not. Factoring and Spot factoring is usually disclosed. Invoice Trading can be completely confidential to your debtors. What is the cost of the finance? Invoice discounting is typically 1.5% to 3% over the LIBOR or base rate of the amount financed. Invoice factoring is typically 1.5% to 3% over the LIBOR or base rate of the amount financed. Spot factoring is a discount charge typically between 7% and 9% of the amount financed. Invoice trading, the maximum cost of finance is set by you and driven down by investors competing to fund the invoice, typically rates are between 0.6% to 0.9% of the amount advanced per 30 days. How long is the contract? Invoice discounting is between 1 and 3 years. Invoice factoring is between 1 and 3 years. Spot factoring has no set limit as you submit invoices as and when you need to access the money. Invoice trading has no set limit as you submit invoices as and when you need to access the money. How quickly can I access the finance? Invoice discounting can be funded immediately, but it does take between 4 and 12 weeks to arrange. Invoice factoring can be funded immediately, but it does take between 4 and 12 weeks to arrange. Spot factoring can be funded within 24 hours once the facility is agreed, balance less fees on collection of payment. Invoice trading takes up to 48 hours to set up membership, funds are delivered within 24 hours of your auction closing. For further information and help with setting up an Invoice Trading account, please either call us on 0845 1260350 or complete our short Invoice Finance enquiry form and we will call you.