The smarter way to find Invoice Financing
What is invoice finance?
Invoice financing allows you to bridge the cash flow gap by getting early payment on invoices. Funding providers may offer payment of up to 98% on your unpaid invoices and you remain in control of which invoices you select to release finance.
This method of funding is almost immediate. You can receive money within a day, rather than waiting weeks or even months for outstanding payments, helping you resolve cash flow problems in an instant.
You may be asked to provide a personal guarantee to ‘secure’ the finance. This means that you take on a certain level of personal responsibility for the debt through your own finance or assets.
Why choose invoice financing for your business?
Invoice financing is perfect for start-ups or SMEs looking to release the cash tied up in invoices due to late payment or lengthy payment terms.
Customer credit insurance is typically included within the arrangement and it is also possible to include factoring facilities to take care of the credit control function, removing the burden of chasing payments from your businesses.
You can usually choose to apply for invoice financing across your whole ledger or select as many or as few customers as you wish.
Invoice finance offers you the flexibility to use it on an ‘as and when’ required basis, either deploying it as a short or long-term basis, depending on the needs of your business.
Unlike other types of business finance eligibility is based on your dealings with creditworthy companies, not on the credit rating of your own business. This can make funding is easier to obtain.
Where can you find a specialist invoice finance provider?
At Financer.co we can partner you with many invoice finance providers.
When you apply online for business finance with us, we match your needs with providers who understand your sector and have plenty of insight into the help that your business requires.
What can you use invoice finance for?
Invoice finance can be used to finance a number of things but it is typically used for working capital requirements rather than longer-term investments.
It is used for things like:
- Paying staff wages
- Paying utility bills
- Paying suppliers
- Covering rent
It is not normally of sufficient value for longer-term investments such as:
- Expanding your business premises
- Investing in plant or new tech
- Purchasing any long-term assets
What else should I know about invoice finance?
Depending on the provider, invoice finance can help you almost instantly realise the value of 85 to 98 percent of the sum of your invoices.
The funding amount of your unpaid invoices will usually be for no longer than 90 – 120 days, with costs in the region of two to five percent of each invoice’s value.
Although credit checks of your business are not usually undertaken, it can be a requirement that you have been trading for more than three months and achieved a revenue that is at least equal to £100,000 per year. There are now some providers, however, that only require your business to have £40,000 per year of income.
Invoice finance can be particularly suited for businesses that are growing rapidly because the access to finance increases as your turnover does.
It is available from a number of providers who you can apply to online today.
Most common questions