Invoice financing is the process of trading your invoices in exchange for a cash advance. Your money is available to re-invest almost immediately, eliminating the frustration of waiting for customers to pay.
There are two invoice financing routes to consider: invoice factoring or invoice discounting. Both deliver the crucial cash advance we’ve described, but there is a key difference in the payment collection process.
Invoice Discounting vs Factoring
An invoice factoring service includes a cash advance and involves the outsourcing of your sales ledger and credit control to the finance provider, giving you more time to get on with growing your business.
Invoice discounting provides the cash advance but enables you to keep control of your sales ledger. You collect payments and continue to manage your customer relationships.
Invoice finance is enabling thousands of businesses to revitalise their cash flow and get early access to their funds. This is enabling them to re-invest in growth this week rather than in 30, 60 or even 90 days.
Within 48 hours of an invoice being created, a finance provider will advance you up to 95% of its value. Once the customer has paid the invoice in full you will receive the balance of the invoice, minus the finance provider’s fees.
With greater flexibility and less risk than other types of asset based lending, invoice finance enables you to ‘borrow’ your own money and only increases in line with your turnover.
If you’re looking to explore invoice finance options and the potential benefits to your business, remember to get multiple quotes and compare prices to be sure you’re getting the best deal. Businesses of all sizes and across a wide range of sectors use invoice financing as a way to boost their cash flow and keep their business moving. Why waste time waiting for customers to pay when you could be reinvesting in the next step?
- Grow your business with a cash boost
- Hand over your sales ledger to the experts* to save time and stress
- Access your cash when you need it with no need for loans
*Or keep control of your customer relationships through Invoice Discounting.
Whether looking for SME invoice finance or for a larger business, this type of financing can revitalise your business’ cash flow so you can grow your business sooner rather than later. The invoice financier will essentially become your credit control department; many will even assign a dedicated account manager to your sales ledger as if they are simply another member of your team. This means you’re free to get on with the here and now issues and manage other areas that need your attention. Invoice financing professionals are experts at maintaining a balance between effective collection of payments and keeping your customers happy. In addition, if for some reason a customer cannot pay their invoice, many providers offer an added service of Bad Debt Protection which means you will not be required to pay the advanced cash back.
Is Invoice Financing the right choice your business?
We can help you find the best solution for your unique situation. To get started we recommend you check out our Invoice Finance FAQs and have a read through our guides on The Best UK Invoice Finance Providers and Top Invoice Brokers in the UK today.
If you’re ready to take advantage of invoice finance we can help you get quotes from the UK’s leading providers. Complete the form below and we’ll get in contact (usually by phone) to discuss your requirements. We aim to respond within 1 working day.