Compare Invoice Factoring Quotes for your business from Invoice Funding. We are a leading Invoice Factoring and Invoice Discounting Broker.
We take the time and hate out of searching funding deals on your behalf. We compare the whole of the market on your behalf.
Taking time to understand your financial needs we can help to match your business with carefully selected invoice factoring lenders who can not only provide you with the funds that you need, they also have a proven track record in helping businesses within your sector.
How to Compare Invoice Factoring
Invoice Factoring is an asset based lending product that will lend against your businesses unpaid invoices, this allows you to leverage cash that is tied up in moneys owed.
Typically any business that offers services or products to another business can receive 85 – 90% of an invoice. Invoice Factoring can protect a company from the late payment of invoices and save the time required to chase them. It is especially useful for companies that offer credit to their clients.
Invoice factoring can be confusing. It can be hard work to know exactly what you’re paying with a factoring quotation.
Factoring providers might offer a lengthy, detailed proposal, on it there will be a long list of lots of different fees. You may see things like “arrangement fee”, “service fee” or “audit fee”.
It’s will be understandable that you will be if confused by the quote or contract you have been given. With a number of different fees and terms quoted by the factoring providers, for example:
- Arrangement fee
- Service fee
- Non-recourse fee
- Annual review fee
- Retrospective fee
- Refactoring fee
- Extended service fee
- Discount charge
- Audit fee
- Trust account fee
If you feel lost in a terminology midfield and need help understanding your factoring quote, do contact us. We would only be happy to put together a comparison quotation for you within hours.
Invoice factoring explained
Shortage of working capital and Late payments are a cause of major headaches for small business owners. This simple process of getting the cash in on time can make the difference between success and failure for the business. This is where invoice factoring can play apart and offer a workable and valuable solution.
It is a form of short term borrowing whereby a third party will buy your invoice for a fee ensuring that a lack of cash in the here and now won’t stand in the way of your future profit. This frees up both cash and time for you to concentrate on your core business activity and on making it a success.
Depending on the type of invoice finance package you choose you can either use factoring, that’s an invoice financier to manage your sales ledger and collect money owed by your customers, or invoice discounting where you will be lent a percentage of the funds owed to you to drive your business forward, before the debts have been paid and without your customer’s knowledge.
Both routes offer a useful cash injection by providing a large and fast funding stream for your business.
Specialist products available in the UK markets include Forward Finance from Bibby, this product is aimed at businesses with a turnover usually lower than £300,000 per annum. Construction Finance sector specifically offering advances against outstanding billing tranches and Selective Finance, Single Finance and Spot Finance which are all terms commonly used for raising funds against individual invoices.
Who is Eligible for Invoice Factoring Services
Factoring only covers B2B (Business 2 Business) transactions. Each factor will have their own set of conditions that determine whether a business is eligible, so the requirements for obtaining a factoring service will vary. Specifically, qualification may depend on the company’s turnover, and requirements will vary from industry to industry. Some factors specialise in different businesses, such as the building industry, real estate or recruitment.
- However, there are some general similarities across all sectors.
- Your company’s credit rating will probably determine what percentage of the invoice you can receive.
- You will have to give evidence that your company has UK registration.
- Factors will request financial details about your business, such as turnover.
Difference between invoice factoring and discounting?
More than 40,000 UK businesses are using some sort of asset based lending and have used their invoices at one time or another. There’s no doubt that invoice financing can provide a valuable short term funding opportunity for businesses looking to improve their cash flow and, in many cases, expand their client base.
However, despite many similarities, this type of lending is not a case of one size fits all! There are two main routes to this sort of lending and understanding the differences between them is crucial when it comes to getting the right short term borrowing solution for your business.
Difference between invoice factoring and discounting is with who takes responsibility for the sales ledger and collecting payment from customers.
- Invoice factoring means the factor company pursues the payment on behalf of your business:
- They buy your raised and unpaid invoices for a percentage and at a discount
- They collect payment from your debtors
- They provide you with the remainder of the balance once it has been paid
- They take a fee for the service out of the final payment
Invoice discounting enables businesses to retain their sales ledger and payment collection from their customers:
- You send an invoice to the customer as usual and a copy to the invoice finance lender
- The lender purchases your invoice at an agreed percentage of the value minus their fee and usually within 24 hours
- You keep responsibility over the administration of your invoice
- You receive the remaining balance of the invoice value less any charges
While both invoice finance routes offer a fast and straightforward path to boosting cash flow for small businesses, other benefits do differ slightly and are worth taking into consideration.
Benefits of using invoice factoring include:
- It saves time and stress when it comes to chasing customers for payment
- It allows business leaders to focus on future service delivery, building their business and generating more income
- It increases your businesses chances of dealing with clients who pay on time because factor finance companies will run credit checks on future customers
- It offers the potential for you to gain help negotiating better terms with your suppliers
Benefits of using invoice discounting are:
- Control over the collection of funds, sales ledger and credit control remains within the business
- You can continue to nurture contacts with customers by collecting directly from them
- It is discreet form of lending and customers need never know that you are using invoice financing
- It is very fast – in some cases you can have the funds in your account within 24 hours
Compare leading Invoice Factoring Providers
We will compare leading invoice factoring providers on your behalf, we will look at finding you the best fit and one that is FSA compliant. We will ensure that their contract is clear and without any have hidden charges.
leading Invoice Factoring providers will deliver good customer service, if a company treats you well, they will likely be the same with your clients. We deal with over 90 Factoring providers, these are single financial institution, such as a bank, or an independent providers.
Best way to Compare Invoice Finance Quotes.
All Invoice Finance costs to businesses differ some factors like Ashley Invoice Factoring only deal with small companies. Hitachi Capital Invoice Finance will request that businesses have a starting turnover of about £500,000 per year as a quick guide. So usually a quick chat can ensure a better idea of costs once we get an idea of your business.
Knowing that a factor is involved sometimes prompts clients to pay in a more timely manner. The factor themselves will usually pay within 24 – 48 hours of accepting an invoice.
However, because the factor contacts the customer directly, this is also a potential risk. That said, it is usual to agree a protocol for contacting your clients with the factor beforehand.
- Sometimes factors can refuse an invoice, so clear planning is essential.
- The service is not free and there can be hidden charges.
- Ending a factoring agreement usually involves some kind of notice period.
Benefits of comparing Invoice Factoring with us
As a leading invoice factoring comparison agency we take care of all the hard work to find the right factoring provider on your behalf. We use our knowledge to match your business with the right lender. After being in the sector for over ten years we understand the needs of most businesses.
One benefit is there is no cost to you, the lender will pay us a commission should you accept their quotation.
Compare Invoice Funding
If you would like to Compare Invoice Factoring Quotes, we will send you 3 price beating quotes from Invoice Factoring companies. It is so simple to do, simply complete the online enquiry form on our website. Invoice Funding are leading Invoice Factoring Brokers, we save you time by comparing quotations on your behalf.
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Seasoned professional with a strong passion for the world of business finance. With over twenty years of dedicated experience in the field, my journey into the world of business finance began with a relentless curiosity for understanding the intricate workings of financial systems.