Invoice Finance helps tens of thousands of businesses in the UK to turn outstanding invoices into cash in the bank, quickly and easily.
It’s a straightforward process used by many companies, from major plc's to micro businesses, that can support the growth of your business by providing finance that increases in line with your sales.
What is Invoice Finance?
While there are a few variations of Invoice Finance, the general principle is the same; once you have delivered goods, or provided services to your customers, the sales invoice can be assigned to a lender who will advance a percentage of the invoice amount, including the vat. While Invoice Finance can be used across a wide variety of sectors, the general principles are that only Business To Business invoices can be funded for goods or services that have been delivered in full. Some funders will consider stage payments and contractual debt, usually advancing at a lower rate.
Once invoices are assigned to a funder they can usually make cash available the same day. Funders will undertake ongoing verification of the invoices you assign to them, and will usually ask you for proof of delivery of goods or services, on an ad hoc basis, as part of their processes.
How Much Can Be Accessed?
The advance rate can vary, but is typically between 80% and 90% of the gross value of an invoice, depending upon the nature of the goods or services provided.
When the invoice is settled by your customer, the funder will make the remainder of the balance available to you, minus their charges.
Confidentiality is Key
Facilities can be on a disclosed basis, where your customer is aware that the invoices have been assigned to a particular funder, or confidential, where the funder stays in the background. Which option you choose, will depend on the individual needs and financial standing of your business and we can advise and guide you with through the maze of available alternatives.
Many lenders, such as FlexABL, use smart technology to link directly to your accounts packages, reducing the work in running an Invoice Finance facility and maximising the available cash.
Depending on which Invoice Finance option you choose, funders can also assist you with your credit control and provide bad debt protection, ensuring that you get paid, even if a key customer cannot pay their bills.
The range of Invoice Finance options in the market is huge, ranging from clearing banks to smaller, bespoke independent funders and we can help you find the right fit for your business, first time. Because most lenders will tie you into a minimum 12 month contract, choosing an ill-fitting funder can be costly and frustrating.
Invoice Finance can be a very effective way of financing the growth of your business, but taking the right advice is key, so please contact us to discuss your requirements.
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Why don't you assess how much your business would benefit from having 80-90% of your invoices paid immediately?
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