Invoice Finance
Quickly Improving Your Cashflow
What is Invoice Finance?
Invoice finance, also known as accounts receivable financing, is a flexible business funding solution that allows companies to access funds tied up in unpaid invoices. By borrowing against outstanding invoices, businesses can improve cash flow and secure immediate working capital without waiting for customer payments.
How Does It Work?
Instead of waiting for customers to pay, businesses can sell their invoices to a finance provider (known as a factor) at a discounted rate. The process works as follows:
- Invoice Submission: The business submits its unpaid invoices to the finance provider.
- Advance Payment: The provider advances a percentage of the invoice value, typically 80-90%.
- Final Settlement: Once the customer pays the invoice, the provider releases the remaining amount minus a small fee.
This simple and efficient process helps businesses bridge cash flow gaps and manage operational expenses.
Who Benefits?
Invoice finance is an ideal solution for businesses across various industries that experience cash flow challenges. Here are examples of businesses that commonly use invoice finance:
- Small and Medium Enterprises (SMEs): Quick access to funds tied up in unpaid invoices.
- Startups: Maintain healthy cash flow while waiting for client payments.
- Service-Based Businesses: Consulting firms, marketing agencies, and IT service providers.
- Manufacturers: Bridge production costs and long payment terms.
- Wholesalers and Distributors: Cover inventory and operational expenses.
- Construction Companies: Manage cash flow during extended project timelines.
- Staffing Agencies: Meet payroll and other costs while awaiting client payments.
- Transportation and Logistics: Cover high upfront costs for operations.
- Technology and Software Companies: Manage cash flow during long payment cycles.
- Healthcare Providers: Address delays in payments from insurers or government entities.
Benefits for Your Business
- Access to Immediate Funds: Secure funding against your sales ledger without delays.
- Reduce Risk: Minimize bad debts and late payments with improved cash flow.
- Flexible Funding Options: Facilities available from £5,000 up to £5 million.
- Customizable Solutions: Choose between invoice discounting and factoring.
- Rolling Contracts: Flexible agreements tailored to your business needs.
Why Choose Invoice Finance?
Invoice finance offers a reliable and scalable funding solution, ensuring your business has the liquidity to grow and thrive. Whether you need to cover operational expenses, invest in growth, or manage seasonal fluctuations, this solution provides the flexibility and control you need.
Contact Us to Learn More
Ready to unlock the funds tied up in your unpaid invoices? Let us help you achieve your business ambitions with tailored invoice finance solutions.
For additional guidance, visit UK Finance’s Business Finance Guide to explore how invoice finance can support your business growth.
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