Invoice Discounting UK Wide

When asked about the benefits of invoice discounting UK businesses are most likely to highlight the fact that it releases cash locked up in unpaid invoices; that it’s a more flexible form of finance than traditional bank overdrafts; and that it can generate higher levels of funding than other methods. It’s a popular financial option.

And yet if you look at the history of invoice discounting UK companies have only really been using it since the 1980’s. It developed from the concept of factoring, which came to us from the US in the 1960’s and was slow to take off. But invoice discounting gained almost instant approval from the market and soon outstripped factoring, growing at a yearly rate of 20%.

Nowadays, you only have to key in ‘invoice discounting UK’ to find a wide range of providers offering this facility. In fact there are currently more than 47,000 businesses using invoice discounting UK wide and throughout Ireland, financing invoices worth £208 billion each year. [Statistics from ABFA website]

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Who is using invoice discounting?

The business sectors most likely to be using invoice discounting are manufacturing, transport, distribution and the service-related industries, and it provides benefits to businesses at all stages of development:

• Business start-ups are often able to secure higher levels of funding through invoice discounting than might otherwise have been possible.
• Businesses facing financial difficulty often choose invoice discounting to provide a speedy injection of capital or to solve cashflow problems.
• Growing businesses are able to make instant use of the money they have already earned, rather than awaiting slow payment, enabling them to invest in productivity and seize opportunities for further growth.

Could your business be using invoice discounting?

Generally, to be eligible for invoice discounting UK businesses have to:

• Be a provider of products or services to other businesses
• Offer their customers credit terms of 30 to 90 days
• Have an annual turnover of at least £50,000
• Have a proven track record.

How does invoice discounting work?

1. You supply goods or services to your customers and raise an invoice.
2. You inform your invoice discounter of the amount of the invoices you have raised.
3. The invoice discounter advances you a percentage of the value of the invoices (up to 90%) usually by the following working day.
4. When a customer settles their invoice, the whole amount is paid to the discounter.
5. The remaining percentage is refunded to you, less the discounter’s monthly service fee and interest charges.

The amount advanced to you through invoice discounting grows with your business (i.e. with the value of the invoices you raise). You don’t need to keep renegotiating increases as you would with an overdraft.

How to choose from the many providers of invoice discounting UK wide?

There’s no getting away from the fact that you’ll need to compare different providers quite rigorously to find the one best suited to supporting your business, at the best price. Using an invoice discounting broker is a much easier option.

Touch Financial is a leading independent invoice discounting broker. On your behalf, we can compare all the products available from a panel of more than 20 quality providers of invoice discounting services, and help you:

• Save time trawling through different quotes and small print
• Save money with exclusive deals that are only available through us
• Favourable rates and exclusive offers, for example ‘try before you commit’ periods with selected providers.

We provide impartial advice very quickly, and can often introduce you to a suitable provider on the same day. We’re able to offer our assistance to customers interested in invoice discounting UK wide. And it’s free.

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Also in this section:

• The difference between factoring and invoice discounting
  
• Selecting an invoice discounting company
• Where to get invoice discounting help
• Invoice discounting UK wide