Invoice Finance
Invoice Finance is particularly handy for paying bills, funding growth or just releasing working capital that’s tied up within your trading cycle. You’ll lose 1-3% of the invoice amount per month as a fee.
Beware the honeymoon rates that are used to get your business. For regular use, expect to pay service charges of about 1.75% of gross turnover. You’ll need a quicker decision on initial funding and then flexibility to increase funding and credit limits. Alternative funders have fewer clients, so decisions are made as part of a personal service. Businesses whose trading cycles rely on prompt payment of invoices can then free up working capital for investment in stock, and speed up the contracts and orders cycle. As part of this service, you can outsource credit control and collections, freeing up valuable time. You can cover yourself against bad debts with credit protection. All credit scores are welcome, as the invoice is used as equity. Approval can be very fast: a few days, sometimes hours.
What is Invoice finance?
An Invoice Finance facility cashes your invoices within 24 hours. Your client then repays the Invoice Finance facility at a later date.
Improves cash flow.
Frees up time spent chasing customers for payment.
Covers you against bad debts.
Selective
Select which customers to receive immediate payment from.
More flexible but higher interest.
Only pay on some invoices when it suits.
Whole Turnover
Take control of the front end of your buying cycle and function with payments in real time.
A new dynamic to the way you trade.
Factoring
Lender funds against individual invoices on a case by case basis (the higher the credit rating of your customer, the lower the interest you would pay) (risk/reward). Credit control required.
Discounting
Lender funds against your total ledger, which can be uploaded electronically, basic accounting packages required as more monthly reporting is needed by the third party lender. No credit control as it’s all internal.
Recourse
You must repay the Invoice Finance facility if your client defaults.
Non Recourse
Bad Debt Protection.
CHOCCS
Client Handles Own Credit Control Service.
Get 85% upfront. Remainder on collection.
Third Party Handles Credit Control
Factoring without.
Company handles credit control service.
Hedged against defaults.
Single Invoice Finance
With single invoice finance, you can pick which individual invoices are funded on an ad hoc basis.
This allows for total flexibility but a higher service fee against the invoice (2-3% of gross invoice value every 30 days).
You can employ this facility with or without CHOCCS.
Single Fee
Most invoice facilities charge a service fee (percentage fee against gross invoice value) and Discount or Finance Fee (annualised interest rate on money borrowed).
Normal Fee
For businesses that wish to know exactly how much the costs are per invoice for budgeting purposes etc - a ‘single fee’ or ‘bundled fee’ is an option. This is a higher service fee percentage with no interest rate.
Export Debt Funding.
Most invoice financiers will not fund debt outside the UK. Those that do will only fund up to 30% of the ledger being exported. It’s very rare to match 100% of export. Trade Finance may be more suitable. For more information,
contact us on: 020 8067 1369
Invoice Finance via
Traditional Business Banking
You might be viewed as a business in distress, due to banks' classifications for their customers.
Invoice Finance via
Alternative Business Banking
No stigma, independent service. More competitive pricing. Access to data and verification techniques.
Get in touch
Talk to us about any of our products – no obligation.
020 8067 1369
[email protected]