Flexible finance for growing businesses
- Immediate cash injection
- Finance that grows as your business grows
- Saves time
- Protects against bad debt
- Personal security not usually required
Invoice Finance is a way for businesses selling their goods or services to other businesses to borrow cash using their outstanding invoices as security.
There are two main types of Invoice Finance – Factoring and Invoice Discounting.
When you factor your invoices, the factoring company also collects payment from your customers.
Your invoices will be issued with a notice, telling your customers that they need to pay the factoring company. They will send out statements, and carry out credit control on your behalf.
You can also include bad debt protection, meaning you will still get paid if your customer becomes insolvent or takes a very long time to pay (protracted default).
Invoice Factoring is best suited to start-ups and young, fast growing businesses that do not have the time and resource to chase debts.
With invoice discounting, your customers continue to pay you directly and you are responsible for your own collections.
Invoice Discounting is a confidential facility, your customers continue to pay you directly as normal and are never likely to be aware that you are using this form of business finance.
Invoice Discounting is suited to mature businesses that have good systems of control and reporting. You must be able to demonstrate effective credit control processes and be able to provide accurate management information in a timely manner.
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