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Invoice Finance

It can be very worrying when your business appears to be running out of cash. Perhaps surprisingly, this problem can be easy to solve.

If you sell to other businesses on credit terms, you can use invoice finance to improve your cash flow. With invoice finance, you don’t have to wait a month or six weeks to get paid – the cash comes in as soon as you’ve raised the invoice.

What difference would it make to your businesses cash flow if most of your outstanding sales invoices were paid today? That’s the benefit invoice finance can bring to your business.

Call the Business Recovery team now on 0800 157 7355 to find out how much extra cash you could raise through invoice finance.

There are various forms of invoice finance but they typically fall into two different categories – invoice factoring and invoice discounting.

Invoice factoring

The benefits of invoice factoring extend beyond improving your cash flow. Factoring also simplifies your administration by taking over the often time consuming task of credit control.

Here’s what happens under a typical invoice factoring arrangement:

1. You sell goods or services to a customer and raise an invoice.

2. The invoice is sent to the customer and your invoice factoring funder.

3. The funder pays you up to 90% of the invoice value right away, usually within 24 hours.

4. The funder manages credit control for that invoice, sending statements and making sure the customer pays on time.

5. When the customer pays, the funder gives you the unpaid balance of the invoice, minus their charges.

Invoice discounting

The big difference with invoice discounting is that while it operates in a similar way to factoring, you remain in charge of credit control.

Invoice discounting is an alternative that’s best suited for established businesses with a good track record of credit control, or who do not want their customers to know that invoice finance is being used.

For a no-obligation discussion of how invoice discounting or factoring could benefit your business, you can call the Business Recovery team right now on 0800 157 7355

The benefits of invoice finance

Many firms use invoice finance simply to ensure that cash keeps flowing, even during difficult times. One late payment from a major customer could be enough to bring your business to a standstill, unless you have measures in place to protect yourself.

The many benefits of invoice discounting and invoice factoring include:

  • It’s a free flexible arrangement that can grow with your business.
  • You waste less time worrying where cash is going to come from to pay bills and taxes.
  • You have more time to spend on developing your business.
  • You have the cash to invest in new staff, equipment or markets.
  • You are not taking on the burden of an extra loan or overdraft.
  • You can protect yourself from a customer becoming unable to pay their bill (through a non-recourse arrangement).