Invoice Finance – What Is Invoice Finance?
Invoice Finance is the summary term for the receivables financing products factoring and invoice discounting. There are distinct differences in the way that each product works.
Invoice finance releases the cash that is tied up in the unpaid sales invoices of a business to improve cash flow. This cash can be used for any purpose. The business can choose to have help with its credit control or it can handle its own collections. Invoice finance can be totally confidential so that your customers do not know that you are using invoice finance.
How Does Invoice Finance Work?
Invoice Finance works as follows:
- The business provides information about the sales invoices they have raised to the invoice finance company – this can be done electroncially and can be automated if you choose.
- The invoice finance company provides an initial payment of up to 95% against the invoices.
- The business either retains the task of credit control or receives help from the invoice finance company chasing in its overdue invoices. If credit control assistance is required it can even be undertaken in the name of your buisness so that your customers are unaware that you are using invoice finance.
- The customers pay and the balance of the invoice, less charges, is passed to the business.
- As new invoices are raised so the cycle is repeated and more funds are released to the business improving its cash flow through invoice finance.
Bad Debt Protection – If Required
If required the invoice finance company can also provide you with protection against bad debts (often called Non Recourse Invoice Finance). That way, if your customers fail to pay, you still get paid by the invoice finance company.
Who Is Elligible To Qualify For Invoice Finance?
Invoice discounting can be provided to most businesses providing they raise invoices on credit terms or make applications for payment (as happens in the construction industry).
New companies or those with historic losses and/or no financial net worth can recieve invoice finance. Even companies with poor financial performance, an adverse credit history or businesses in administration, CVA (Creditors Voluntary Arrangement) can still access finance through some forms of invoice finance.
How To Get Quotations For Invoice Finance
We would be happy to talk you through the options available. All you need to do is follow the link below, and provide a few details for a free, independent quotation search for invoice finance quotations:
Further Information About Invoice Finance
For more information about invoice finance follow this link: Invoice FinanceShareThis