Engineering Finance – Release instant cash from unpaid invoices

engineering invoice finance fundingAs an engineering company you are faced with daily cash flow issues that can slow down production at many levels this is where our engineering finance can come into play.

If you run a specialist factory or engineering business, we know how hard it is maintaining a healthy cash flow can be.

Specialist CMC machinery, raw materials that never slow down from rising costs and long payment terms in the trade all mean that finding the necessary investment and funding in your business isn’t always easy.

Let’s take a look at what engineering finance is available for the sector sector and the best solutions.

What is engineering finance?

Engineering finance is a type of credit facility which allows you to unlock tied up cash in contracts and unpaid or newly issued invoices. There’s no more waiting for customers to pay. It allows cash to be freed up in less than 24 hours.

The Finance is not dependant on your engineering firms accounts, future earnings or fixed assets, so it can be used by industry of all shapes and sizes. This cashflow funding product help release tied up unpaid invoices as well as helping in credit control.

When you are regularly waiting for your clients to pay their invoices it can put huge pressure on your business, potentially making it difficult to meet day to day costs and the quick turnaround times required in this industry.

Why the engineering sector should consider invoice finance

Invoice financing for engineering firms lets you access the funds, this finance makes use of unpaid invoices. Once cash has been realised it can be used to cover outgoings such as factory overheads, staff wages and suppliers. The money can also be used to invest in more engineering machinery, equipment and specialist software.

We work hard with engineering companies to find the right finance provider which will be able to offer you many benefits including:

  • Tied up working capital – You can plug any financial gaps allowing you to fulfil your expansion goals. It allows you to meet your liabilities such as PAYE, VAT. 
  • Dealing with your customers – Cash within 24 hours limits the effects of slow-paying customers whilst also improving customer relations. 
  • Protection against bad debt – You can add bad debt insurance cover to your factoring facility so a default by a customer is unlikely to threaten your business or significantly affect your credit rating.
  • Removes credit control responsibility from your business – Unable to manage your credit control effectively, the finance company can pick up the burden of chasing customer payments so you can focus on your business. 
  • There is less focus on the financial strength of your balance sheet – Factoring companies rely on the strength, creditworthiness and spread of your customers, whereas banks focus more on your financial information.

Types of Invoice Finance for Engineering Industry

Whether you are already running your own engineering business or considering starting up in the engineering industry, we can help you find the right type of funding option to help you build your business:

We can help you secure the following types of business finance.

Invoice Factoring – Invoice factoring for engineering firms is when a business sells its invoice to a third-party company. It’s a form of invoice finance and will give your business an effective way to improve its cashflow position.

The invoice factoring provider provides the credit control service to recover payment of the unpaid invoice. Invoice factoring companies allow you to release cash from your unpaid invoices quicker than having to wait between 30 to 90 days – and sometimes up to 120 days – for your customers to pay you.

Invoice Discounting – Invoice discounting for engineering firms is an invoice finance facility when a company’s unpaid invoices are used as collateral for a loan. Invoice discounting companies enable businesses to leverage the value of their sales ledger.

With an invoice discounting company, when sending out invoices to customers a proportion of the total amount becomes available from the lender, which provides your business with a source of working capital throughout the month while you wait for the payment of your invoice to be processed.

The benefit of invoice discounting is you maintain responsibility for your sales ledger as well as your payment chasing and invoice processing. The main difference between this method and invoice factoring is that your customer is not aware that you have taken on cashflow finance. If you prefer to keep the financial arrangement confidential from your customers then invoice discounting may be the right product for you.

You no longer have to wait up to 120 days to receive payment for your goods and services, and you remain in charge of your own credit control processes, meaning that you continue to chase late payments and therefore your customers are not made aware of our involvement.

How does engineering finance work?

Rather than waiting for your customers to settle their invoices in 30, 60 or 90 days, the lender will Purchase your invoices at a discounted rate. Advances of up to 95% of the invoice sold is normal for engineering firms. The payment is usually within 24 hours. Your invoicing methods stay the same so there is no need to change software, it allow you to carry on with your business as usual.

1. Invoice your customer for completed work and send them the invoice, with the funders assignment on.

2. The first payment, up to 95% of invoice value is paid into your business account straight away.

3. Depending on the type of invoice finance you use, credit control and credit control can either be handled by yourself, or by the lender.

4. The final payment of the invoice is made to you once the lender is in receipt of the customer’s payment, minus any fees and service charges.

What are the Benefits

  • You can released cash in unpaid invoices within 24 hours
  • 95% of the invoice amount id available on each invoice
  • Fully managed credit control service included
  • Improves working capital within the business
  • No long tied in contracts
  • You can insure against bad debs with invoice insurance

Get a Engineering invoice finance quote today

Interest to understand how invoice finance can help your engineering firm? Invoice Funding are one of the UK’s leading invoice factoring brokers, we had assisted hundreds of businesses across the UK to gain financial support.

We can ensure you get the best deal for your engineering firm. Simply complete the online enquiry form to get started.

Frequently asked questions

How will Invoice Finance help my Engineering Business?

Invoice Finance enables you to improve your working capital to keep your business moving smoothly. While it won’t eliminate bad debt, it should improve cash flow. Reducing your working capital cycle by 20 days or more could be very valuable.

What advantages does Invoice Finance have?

The Invoice Finance provider will take control of credit management. This frees your admin time to spend more profitably elsewhere. Many company owners use factoring to help them regain control of other areas of the business.

Get your unpaid invoices, paid faster!

With an invoice finance facility, the majority of your sales ledger can be paid within 24 hours. Access to fast cash is very important for most businesses.


Invoice finance can be a valuable financial tool for engineering firms. It provides a way for engineering firms to access much-needed working capital by converting their outstanding invoices into immediate cash. Engineering projects often require significant upfront costs for materials, labor, and equipment, and invoice finance can help bridge the gap between invoicing clients and receiving payment.

By selling their unpaid invoices to a factoring company, engineering firms can unlock the cash tied up in their accounts receivable and use it to fund ongoing projects, invest in new equipment, hire additional staff, or cover other operational expenses. This can help improve cash flow, reduce the need for expensive loans or credit lines, and provide greater financial flexibility for engineering firms to take on new projects and grow their business.

Business Finance specialist at Invoice funding | + posts

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.

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