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Invoice Finance

Invoice finance is a well-established flexible product that grows with your business unlocking finance against your credit sales. Rather than waiting for your customers to pay you can access finance against those sales.

Factoring, invoice discounting and spot or selective discounting, all generate funding against your trade sales. Technological innovation has eased the administrative burden, helping clients run their facility, provide real time working capital insight and with the added benefit of reducing the overall cost.

With Chris having 20 years’ experience working for a market leading invoice financier and asset based lender he is well placed to help guide you through the process of choosing the appropriate product and funder to support your plans.

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What our Clients say

“Chris took the time to understand our growth plans and explain the funding journey. He has a great understanding of the market, is very approachable and was always on hand to get things done. I look forward to working together in future!”
YHSS
“Chris took the time to understand our growth plans and explain the funding journey. He has a great understanding of the market, is very approachable and was always on hand to get things done. I look forward to working together in future!”
YHSS

Frequently Asked Questions

Invoice finance is a product that provides funding by raising finance against your existing unpaid invoices.

Both generate funding against your sales invoices. The difference is in how the funder manages the facility and in turn how they interact with your customers. With Factoring, your customers know how you are funding your business and who is funding it. Your funder will provide an agreed level of credit control and regularly chase your customers for payment. CID as the name suggests is confidential and the funder leaves the running of the ledger and all credit control to you. Your customers are required to pay into a designated bank account, which is in your company name, helping retain confidentiality.

This is a light touch, fast, flexible form of IF that allows you to select specific customers or invoices for financing. Typically you do not need give business or personal security and there are no fixed fees, so you only pay when you have borrowed against specific invoices. A great option for short term and unexpected or irregular cashflow needs.

Businesses selling to other businesses and offering credit terms. IF typically provides funding within 24 hours against the value of your new invoices, plugging the cashflow gap until your customers pay the invoice.

Each funder has their own nuanced charging structure and often uses subtly different language and abbreviations for the same thing. Comparing quotes can be confusing, an example of this is the percentage that funders will fund your invoices at: initial percentage, advance rate, invoice funding percentage, initial payment level are all the same thing as described by different lenders.

This coupled with the operational terms of the facility make it essential to engage with an experienced invoice financier to ensure that the facility you are signing up to is appropriate for your business and that you understand the total cost of the facility.

This can vary from 90% at the upper end to 60% or lower. Many factors will influence the funding rate, but a good rule of thumb is the simpler the debt the higher the funding percentage will be, and the more contractual the lower.

This varies case to case, however there are two main costs, the discount rate (Interest rate) and the monthly service fee, which covers the ongoing monitoring of your sales ledger and invoices that have been assigned for funding.

Technology plays an increasingly important role in this regard making the day-to-day administration of facilities increasingly light touch. Most funders use ‘data extraction’ tools to automate transfer of sales ledger information and to a degree data processing.

IF is best suited to funding growth and the beauty of the product is in its flexibility. It is frequently used to support the refinance and acquisition of companies, MBO’s and to give management teams the time to affect turnaround plans.

This will vary and funders will assess on a case by case basis. Factors like large debtor concentrations and export sales will influence whether you will need credit insurance in place or debtor protection (insurance provided by your funder). The latter will be funder specific and can be influenced by the credit strength of your customer, terms of contracts in place, payment terms and payment history.

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