Release cash tied up in your customers’ outstanding bills through invoice financing
If your organisation invoices business to business for its goods or services then invoice financing could let you release that money straight away. You could free up 95% of cash owed to you so it can be used for investment or cash flow. The number of different invoice finance options available has grown significantly over the past few years and we can secure it for you through our existing panel of lenders.
Already using a lender?
If your business already uses invoice finance and has been with the same lender for a couple of years, we’re confident we can secure a better price. The market is more competitive than ever now and that’s good news for borrowers. Get in touch.
New to invoice finance?
Invoice financing is simple, a third party financier buys your unpaid invoices off you for a small fee. There are two main types, invoice factoring and invoice discounting. For both types, fees vary by lender, but either option can be a fast solution to bolster your business’ cash flow.
Benefits of invoice factoring
Otherwise known as ‘debt factoring’; the financier collects the money owed direct from your customers. This makes it clear to them that you’re using invoice finance. The financier lends you part of the total amount (around 85% usually), with the remainder (minus interest and fees) paid to you once the invoice has been cleared.
- They manage overdue invoices, leaving you to run your business
- They help you negotiate better terms with your suppliers
- They credit check potential customers for you
Benefits of invoice discounting
With invoice discounting, you keep control of your sales and customer contact. The financier lends money against any unpaid invoices and you pay them an agreed fee in return. You can sell outstanding invoices to a factoring company that releases up to 90% of the value within 24-hours. Invoices are paid into a dedicated account, after payment has been received, the finance company will release the other 10% (minus a small fee).
- This option lets you use invoice financing confidentially
- You stay in control of customer relationships, but still have to chase invoices
- As your customers pay, you can borrow a higher percentage
Other types of invoice financing
Confidential invoice discounting
This gives you all of the benefits of invoice factoring while still being discreet and confidential, so your customers don’t find out. This option works well for businesses that already have effective credit control resources in-house but would like to speed up the turnaround time between invoicing and payment.
Small business factoring
Specially designed for small businesses, this lets new companies have access to an invoice finance facility of up to £50,000 to free up money that’s tied up in outstanding invoices. Full credit control can also be offered, allowing you to focus on growing your business instead.
Confidential invoice discounting for large businesses
Many of the lenders we work with can support organisations turning over in excess of £500,000 per year. This option is particularly useful for manufacturers, wholesalers, transport firms and employment agencies. The funder usually just needs to confirm the financial health of your business and that the required processes are in place for repayment.
Selective invoice finance
Selective factoring can give you business the best of both worlds, letting you pick and choose which invoices you release funds from and which you’re happy to leave. This option lets you get a quick injection of cash for one-off purchases or investment while giving you the option to manage some customers yourself and some through factoring, either temporarily or permanently.
The selling of one invoice to a funder, can improve cash flow with an immediate cash injection, however the percentage paid to the lender can be higher compared to the above options, no minimum contracts periods companies can did in and out as required.
This can help your freight business ride out the natural ups and downs of the industry by providing an effective and tailored solution to maintaining a steady stream of working capital. Speed up the chain from order to invoice by releasing the equity tied up in an order book (See our haulage and logistics options).
Another specialist industry product, this allows construction firms to maintain a fluid credit facility, regardless of size. For any contractor or sub-contractor, working within the financial parameters of contracts with larger companies can be a challenge. Structured staged payments, ‘applications for payment’ and retention clauses can hold back as much as 5% of a contract’s worth until practical completion, which can be years or months after sub-contract works were completed (See our construction options).
This can bring stability to the business of paying temporary, contracted or permanent employees. Recruitment factoring is ideal if you’re looking to expand and grow your business but haven’t got large cash reserves to fund it. The additional bank support services this type of funding offers can be vital, especially during the startup phase when there are significant outlays of capital.
Starting to work with any customer is a calculated risk until the first payment comes through. When dealing with businesses overseas where different cultures and languages are involved the question mark can be even larger. International invoice factoring makes sure the majority of the invoice reaches your bank account straight away, so you can carry on trading overseas without worrying about financial setbacks.