Invoice Finance
Unlock cash tied up in invoices
Ready to go?
Apply in 3 minutes. One of our Business Finance Specialists will then guide you through your options.
Invoice FInance
Unlock cash tied up in invoices
Ready to go?
Apply in 3 minutes. One of our Business Finance Specialists will then guide you through your options.
Funding Amount
£5k-£10m
Advance rate
Up to 90% of invoice
Time to Arrange
As Little as 7 Days
A credit line to allow your business to grow
Invoice finance helps growing B2B companies unlock cash tied up in invoices speeding up cash flow. This flexible credit line gives you the working capital required to take on new clients, fund new contracts or pay suppliers quicker.
What is invoice finance?
Invoice finance helps B2B companies unlock cash tied up in invoices therefore speeding up cash flow. A line of credit is put in place allowing you to access up to 90% of the value of the invoices due to you. Invoice finance is a general term covering invoice discounting, factoring and construction finance.
How does invoice finance work?
- You provide the goods/services to your customer and invoice them
- You key the invoice details onto the invoice finance provider’s system
- A percentage of the face value of the invoice is paid to you
- For an invoice discounting facility you then chase and collect payment from your client as normal
- For an invoice factoring facility the lender will chase and collect payment from your client on your behalf
- When your client pays the balance of the invoice is paid back to you – less fees payable to the lender
Recently completed Invoice Finance facilities
- £475,000
- Fashion wholesale
- 85% funding
- £150,000
- Construction
- 50% funding
- £100,000
- Wholesale
- 80% funding
Am I eligible for invoice finance?
Invoice finance funds B2B (business-to-business) invoices. So, if your clients are other businesses and you sell them a product or a services then you’re likely to be eligible for invoice finance. Invoices to individuals cannot be funded. Typically invoice finance is for Limited Companies as the lender will require a debenture (a floating charge over the debts of a Limited Company).
Another key is that you invoice in arrears. A product or service has to have been delivered for invoice finance to work. You won’t be able to fund invoices raised in advance of the work.
All lenders will have their preferred sectors, and many lenders won’t fund the construction sector for example. However, there are specialist invoice finance providers who fund more complex scenarios like the construction sector where there are staged payments, valuations and so on.
What are the benefits of invoice finance?
- Cash is received quicker. Rather than waiting 30/60/90 days for your invoice to get paid the majority of the value of the invoice is cashed in up front helping cash flow.
- A business’s debtor book (outstanding invoices) is often their biggest asset. Invoice finance leverages that asset, normally meaning security over property is not required.
- Cash can be put to work back in the business – funding growth, funding new contracts, improving negotiating power with creditors and so on.
- Invoice finance can be more flexible than loan or overdraft finance – which is great for growing businesses. The credit limit grows proportionally to the debtor book, unlike loans and overdrafts which are normally limited by the value of tangible security available (property).
- Under Invoice Factoring the lender chases and collects payments on your behalf meaning you don’t need to undertake that credit-control function.
- Borrowing against your outstanding invoices can raise more cash than loan finance. Funding is agreed as a percentage of your sales ledger, unlike loan finance which is agreed in proportion to your profitability.
How quickly can I get Invoice Finance set up?
Getting set up for invoice finance varies in process from lender to lender. Some alternative finance lenders can get a facility done and dusted in days while traditional lenders can take a month.
A typical process is submission of an application (including financial accounts, an aged debtor and aged creditor list and other general business details) followed by an indication of terms after a day or two. Once terms have been agreed a “survey” or “audit” will be instructed. This is a deep dive into your credit control processes, records and history. This can take a week or so, followed by a full credit underwriting process.
Your Invoice Finance facility is waiting.
Talk to one of our Business Finance Specialists. We’re on hand to take you through the options available.