Invoice Financing, Factoring & Discounting
Get paid for your invoices as soon as you send them
Looking for invoice financing? Fill out our quick form to get started...
How invoice finance works
Invoice
finance allows you to get your invoices paid up front without having to wait until
the end of the payment term, keeping your business's cashflow flowing.
Why choose Invoice Finance
Broadly speaking, there are two key types of invoice financing a small business might choose:
Invoice discounting
This invoice financing product means that all of your invoices will be financed automatically and up front.
Invoice factoring
This invoice financing option allows you to select which invoices to finance.
Other invoice finance product
There are also many variants in between invoice factoring and invoice discounting, including options which allow you crowdfund selective invoices (called invoice trading). Not sure which is the best option for you? We're here to help. Call us to have invoice financing explained and recommendations made by SME finance experts.
Invoice financing vs factoring
- Invoice Discounting: cheaper but all your debtors must be financed. Usually only for larger firms.
- Invoice Factoring: Select invoices to finance as suits you. Convenient and for that a little more expensive.
- Invoice Trading: Crowdfunders will now finance individual invoices at competitive rates
- A mix of all of the above: there are many variants available. Call to discuss.
Frequently Asked Questions
What percentage of my invoice can I fund up front?
It all depends on your business, but you can potentially fund up to 90% of your business up front. The typical figures are anything from 75-90%.
What security is required?
This depends on which Invoice Financing option you choose. If you go for Factoring or Invoice Trading then it is likely that no security is required. Invoice Discounting usually requires a floating debenture over your business.
I'm already with someone for my Invoice Finance; is it easy to switch providers?
Yes, it’s very easy and it happens all the time. There could be a number of reasons why you might consider switching to another provider. Perhaps you’re unhappy with the level of service or you’re searching for a more cost-effective deal. The good news is that despite what people may assume, switching providers is not a lengthy process.
Is it possible to get Invoice Financing for start-ups?
In some cases yes, but it all depends on your business and your projected turnover as this will be taken into consideration when going through this process. Not all providers deal with start-ups, but there are providers out there that do.
Do finance providers require Personal Guarantees?
No, not always. The finance is secured against your debtor ledger and assuming this is adequate, a Personal Guarantee may not be required.
Will it make my business look bad if I have Invoice Finance?
No, not at all. This is a common misconception. Over 40,000 UK SMEs use Invoice Financing and it merely shows that you are prudently managing your cash flow. If anything, that should give all your customers and suppliers more confidence in your business.
Is it possible to get Bad Debt protection or Credit Insurance?
Yes, one of our Invoice Financing specialists can arrange this for you, as either part of your facility or separately. It’s important that you have the protection in place, just in case your customer cannot settle their invoices.
If my business is in the construction industry, can I still get Invoice Financing?
Yes, that’s fine. For debtors overseas, international factoring (or export finance as it is sometimes referred to) is the best solution. It works in the same way, except that the UK factor works directly with agents in the country that the invoice is issued to. We have plenty of providers that will arrange Invoice Financing for overseas debtors, so get in touch with us to find out more.
My debtors are all overseas; can I still get Invoice Finance?
Yes. We have providers that will arrange Invoice Finance for overseas debtors.
How much does Invoice Financing cost?
This depends on which option you choose (Factoring, Invoice Discounting or Invoice Trading) but there is usually a facility fee of 0.5-2.5% and also a charge for the finance on each invoice (again anything from 1-3% over BBR).
What do I need to apply?
Applying for Invoice Financing, Factoring & Discounting is very easy. Below you'll find all of the things you need in order to apply.
- Eligibility Criteria Good debtor book and ideally an established business with good credit.
- Documents Required Financial statements, debtor ledger.
- Additional Comments Invoice financing for small business clients can vary widely. We offer recommendations, guidance and tailored support for your unique business.
Invoice financing explained
Invoice financing is a hugely competitive market. High street banks will usually provide the best rates but, unlike a specialist invoice financing company, they usually only finance your entire book.
High street lenders don't deal with concentration risks very well (i.e. if a disproportionate amount of your business is with one debtor) and they may not be as flexible as you might require.
For options beyond the High Street there are dozens of other options from challenger banks and private lenders, to crowdfunders. Each option offers varying degrees of flexibility. It's a specialist area and mistakes can be expensive if you get locked into long term contracts. For an expert overview of the market and specialist recommendations for your business, contact us today.
Contact Us Today
Discuss your invoice financing options with a member of our team
Enquire Online
Fill out our simple form to have a member of the team contact you
01494 355162
Call today to discuss your finance options with a member of the team