If you sell your products or services on credit terms, then Invoice Finance can give your business an often much-needed boost to your cashflow.
Instead of waiting 30 days or more for your customer to pay you after you have made your delivery, you could receive up to 90% of the gross invoice value within 24 hours of its issue, and then receive the balance, less any fees, once the invoice is paid.
Factoring is Invoice Finance plus Credit Control. So as well as the Factor advancing you up to 90% of the invoice value, they will also carry out the collections activity needed to ensure the invoice is paid on time. This will be done by statement, letters and phone calls, and means that you do not have to worry about having to chase your customers for payment, and can concentrate on growing the business and keeping your customers happy.
With Invoice Discounting you receive the funding against your invoices, but the Credit Control is left up to you. In most cases your customers don’t even know you are using an Invoice Finance company, as the facility is confidential.
Meaning ‘Client Handles Own Credit Control’, this is the same as Factoring, in that the Factor will advance you the funds and send statements and letters, but you will be responsible for the telephone chasing.
This can be added to any of the above facilities, to give you the added comfort of knowing you are covered should any of your credit approved customers cease to trade. A bad debt can be devastating for any business, and can even prove to be terminal, so this could prove to be invaluable.
Single Invoice Finance
If your business is seasonal, or you just have a short-term need for finance and don't want to commit to a full Invoice Finance facility, then Single Invoice Finance might be of more interest. You can select which invoice or invoices you wish to finance, and once approved you will be paid a percentage of the gross invoice value straight away. Then your customer will pay the funder direct, who will send the balance of the invoice to you, after deducting their fees. You can then fund more invoices as and when you need to, but you aren't tied in to long term contract.
Which of the above would be best suited to your business is something that we can discuss; different businesses have different needs. Our job is to ensure we assess those needs and introduce you to the most appropriate funder to meet them.