Invoice Finance

Unlocking your working capital

Invoice finance is when a business gets quick cash by using its unpaid customer invoices as a way to borrow money. It helps with cash flow and makes sure businesses don’t have to wait long to get paid.

What is Invoice Finance

Two primary solutions within invoice finance are:

  • Factoring: factoring involves selling your outstanding invoices to a financial institution (a factor) at a discounted rate. The factor then takes over the responsibility of collecting the payments from your customers. This provides you with immediate cash for your invoices, helping improve your cash flow.
  • Invoice discounting: with invoice discounting, you borrow money against the value of your unpaid invoices but retain control over collecting payments from your customers. It's a more confidential arrangement compared to factoring, as your customers might not necessarily know that you're using invoice discounting.

How does Invoice Finance work

Invoice financing converts a percentage of your outstanding invoices into cash as soon as your goods or services are delivered to the customer.

Interest is charged on the amount advanced whilst the original invoice remains unpaid and additional costs such as administration and monitoring fees may apply.

Both factoring and invoice discounting are aimed at helping businesses access funds tied up in their accounts receivable, enabling them to manage their working capital effectively and alleviate cash flow constraints.

Invoice finance is particularly beneficial for growing businesses that pay suppliers on short terms or are required to hold inventory to fulfil customer orders.

The benefits of Invoice Finance

  • Fast access to funds: quickly get money from unpaid invoices.
  • Improved cash flow: enhance day-to-day operations and growth.
  • Business growth: seize opportunities and expand with consistent funds.
  • No additional debt: It's not like a normal loan, so no extra financial burden.
  • Flexible and scalable: funding adapts as your business grows
  • Efficiency boost: focus on core tasks while outsourcing invoice collection.
  • Small business access: available for businesses with limited credit history.

Client Success Stories