Invoice finance can aid your business by enhancing capital enabling you to pay employees and providers without the added concern about consumers paying late.
At Funding Solutions we specialise in sourcing and structuring suitable and cost effective invoice finance facilities for our clients. We can find you a new facility or review your existing setups.
What is Invoice Finance?
This is a type of finance that supplies financing against the debtor book of a company. Invoice financing is normally an umbrella terms for the particular products that give this kind of finance. These products drop under two main groups which are invoice factoring, also described as factoring, and invoice discounting. There are several ‘hybrid’ products but typically they will be a type of invoice discounting or factoring.
How can invoice financing help your business?
This could release the cash bound in your overdue invoices supplying your business with useful working capital. This could eliminate the anxiety associated with paying wages and suppliers making sure that your business runs smoothly without disruptions.
By utilising invoice finance and in particular factoring you can contract out the credit control to an expert organisation who would use consistent and structured methods to effectively obtain your overdue invoices.
Boosted capital can aid your company to take advantage of profitable opportunities and may allow you to bargain with providers or obtain settlement discounts.
How does invoice finance work?
Each individual finance product works a little differently but the premise remains the same. Business’s supply products and services to other businesses. Once these products or services have been delivered you would give an invoice to the customer on credit terms. This invoice then needs to be given to the finance company. The finance company will then make up to 90 % of the gross invoice worth available to you and you are then able to draw down the funding you need. When the invoice is paid the borrowing is repaid and the balance of the invoice is made accessible to you.
The features of invoice finance
~ This is a flexible kind of working capital that will expand as your business expands
~ For companies that meet the fundamental standards it can be much more freely available compared to a traditional bank account overdraft. It is nonetheless typically overall a lot more expensive compared to a bank overdraft.
~ Invoice finance could be divulged or confidential
~ It can offer outsourced credit control as part of the solution
~ By adding bad personal debt protection or credit insurance coverage it could protect your business against bad debts
~ Invoice finance could be used by exporters and importers
Will my company qualify for a facility?
Invoice finance is readily available for numerous companies varying from businesses that have just formed to significant firms. We offer expert solutions for employment finance and those looking for import finance. There are various types of invoice finance facilities offered and each has its own advantages and requirements. Due to different lenders having their own individual criteria our marketing expertise and knowledge is extensive allowing us to recommend the most suitable product and lender for your business. There is a high chance that we would be able to source you a facility if your business meets the following criteria:
~ Your business markets to other businesses.
~ Invoices are given on credit rating terms or you are intending to release invoices on credit rating terms.
~ You raise your invoices after you have supplied the products or services.
If you intend to discover exactly what finance choices are available to you or if you would like to review your existing facility please call Funding Solutions on 0845 251 4040.