10 things you need to know about invoice financing

Listed below are 10 things you need to know about Invoicing financing, also known as invoice factoring, or invoice discounting, allows businesses to manage their cash flow effectively knowing that funds are always available when you need them. This gives them the freedom to grow as a business. An invoice finance company buys a business’ invoices and releases a percentage of the invoice (up to 95%) immediately. Invoice financing can be faster and more cost effective than a bank loan, a facilities can be put in place within 5 days, making it the perfect financial tool for your business.

Here’s what you need to know about invoice financing:

  1. Invoice financing can give you access to funding on the day you provide your invoice, giving you up to 90% of the value of that invoice.

  2. Factoring companies will credit check potential customers, meaning you can work with companies who pay on time.

  3. Invoice finance can be confidential (known as invoice discounting), so clients don’t need to know you’re working with a factoring company and borrowing against their invoices.

  4. The factoring company will look after your sales ledger, and chase up any unpaid invoices, allowing you time to focus on other areas of your business.

  5. Once the factoring company has received payment from your invoice, the outstanding balance will be pad to you, less any fees / interest agreed.

  6. Invoice financing can save you money – it is often cheaper than using an overdraft from your bank.

  7. Selective invoice financing allows you to release money on an invoice-by-invoice basis.

  8. Invoice finance can help businesses in any industry. These include engineering, recruitment, manufacturing, transport, IT, media, construction and automotive.

  9. Invoice finance with credit protection means that your business is protected from the risk of unpaid invoices, should one of your customers go out of business owing you money.

  10. Invoice finance can help start-up businesses, established businesses, established businesses looking for short term funding, business acquisition and management buy outs.

Invoice Funding provides invoicing finance services to companies that need help with their cash flow. We provide highly flexible finance and accounts receivable solutions, designed to meet the changing needs of your company. For further information on our services please view our website.


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