Invoice Finance for Low Turnover Businesses
Smaller businesses with low turnovers often find the concept of invoice finance attractive. However, the minimum fees charged by many lenders can be off putting for many small businesses. Invoice factoring or invoice discounting can be ideal for businesses looking to grow but most lenders charge a minimum monthly fee which makes it non viable.
At Funding Solutions we are able to help smaller businesses with their invoice finance requirements. There are two ways of doing this:
1) We look to provide an invoice finance facility with a small monthly fee.
2) The alternative is a flexible bundled fee where you can pay a percentage of the value on each invoice without any monthly minimum fees.
Some of these facilities are available without any fixed annual contract. This means that you can try the facility to see how it works for your business.
What are the basic criteria?
1) You should be selling on credit terms
2) You will be selling to other businesses rather than private individuals
3) You will be invoicing in arrears of delivery of your product or service
Invoice Finance providers typically look at your customer quality and your order to invoice process. If you have good quality customers and you have a good audit trail there is a strong chance that you will qualify for a facility. An example of a good audit trail for a wholesaler would be a written purchase order, a copy of a proof of delivery and an invoice raised in arrears of delivery. It can be different for different businesses. For example a recruitment business is unlikely to have a ‘proof of delivery’ but will likely have signed timesheets.