Invoice Factoring Key Features and Benefits
Faster access to cash
Invoice Factoring provides you with quick access to the cash tied up in your unpaid sales invoices. Rather than waiting for your customers to pay, you can receive up to 90% of your sales invoice value upfront, usually within 24 hours.
Debtors act as collateral
This can provide directors with peace of mind, as they can obtain the financing they need to support their business growth, without pledging their personal assets as collateral. The lender places a lien on the company’s outstanding debts.
Borrowing flexibility
Invoice Factoring is a flexible financing solution that can be tailored to meet the specific needs of your business. The more your debtor book grows, the more cash you can generate.
Credit control included
Invoice Factoring is a disclosed financing arrangement. By entrusting credit control to lenders, businesses can benefit from expert collections management while their customers enjoy a streamlined credit control and payments process.
Optional bad debt insurance
Adding optional bdp protects cash flow, mitigates credit risk, provides access to credit checks and debt recovery services, and safeguards your cash flow from the impact of bad debts. You can customise and choose which debtors to cover.
Improved liquidity
Invoice Factoring can improve business liquidity by converting unpaid invoices into cash which can be invested to make the business more competitive.
Eligibility
Invoice Factoring is ideal for businesses seeking to enhance cash flow by leveraging unpaid sales invoices.
You must have a minimum turnover of £50,000 per annum for Invoice Factoring
You should be comfortable with your customers knowing that you factor your sales invoices.
You must sell business-to-business and on credit terms.
Invoice Factoring vs Invoice Discounting
| Invoice Factoring | Invoice Discounting | |
|---|---|---|
| Unsecured lending with charge on debtors | ||
| Includes credit control services | ||
| Confidential so customers are unaware | ||
| Optional Bad Debt Protection (bdp) | ||
| Release funds against whole sales ledger |
Frequently Asked Questions
Is Invoice Factoring right for my business?
If your business would benefit from an ongoing boost to its cashflow and you turn over more than £50,000 per annum, then Invoice Factoring is a flexible solution to free up time spent chasing customer payments and running credit control.
How do I manage my Invoice Factoring facility?
By assigning your invoices to us, you can access up to 90% of the invoice value typically within 24 hours. Your customers will pay into a central account and cash will be allocated on your behalf, at which point you will receive the remaining value minus our fees and charges.
How does Invoice Discounting affect my credit score?
It doesn’t – although we review your personal credit files as part of our checks, it won’t affect your credit score or your ability to get personal finance.
Will my customers know I'm using Invoice Factoring?
Yes – a notice of assignment is added to each invoice and your customers make payments directly to us.