Invoice Finance

If your business has cash tied up in trade debtors (customer that owe you money based on agreed payment terms) then you may benefit from an Invoice Finance facility.

As soon as work is done and invoiced, you are able to drawdown a percentage of the invoice value immediately, instead of waiting weeks or months for the client to pay.

Invoice Finance provides you with a rolling proportion of your sales income, so as your business grows, then so does the facility.  It is a popular finance type for growing businesses.

 

There are a number of different classes of Invoice Finance:

Factoring

Typically aimed at business from start up to turnover up to £1m annually.

Funders are closely involved and also provide additional support by way of credit control.

Your customers will be aware of the facility and the funders involvement.

All business turnover will pass through the facility

Invoice Discounting

Aimed at larger, more established business with turnover of at least £500k per annum.

The business is responsible for managing its own credit control.

You can make the facility ‘Confidential’ meaning customers will not know it is in place.

Selective Invoice Finance

Businesses are able to select invoices to fund against as opposed to all turnover passing through.

Can be used to fulfil a one-off order or particularly large client out of a client base.

 

Facilities are available of up to 100% of the total invoice value (minus fees).

Security of the facility comes by way of debenture and a specific charge over debtors.  Personal guarantees may also be required depending on circumstances and the strength of the business.

New facilities can be completed within 7-28 working days, depending on the complexity of the business and it’s relationship with its customers.

Once live, business are able to request funds the same day they raise client invoices.

Credit Insurance or Bad Debt Protection can also feature alongside an Invoice Finance facility.

Acceptable customer types include:  Sole Trader, Partnership, Limited Company (Ltd) or Limited Liability Partnership (LLP).

Completion Example

Some examples

Case Studies

Construction Client

Specialist construction client purchasing a used Piling Rig. Purchase Price £190,000 plus VAT.HP loan amount £190,000. VAT Only Deposit. 60 monthly repayments. No balloon.Facility completed

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