How does invoice finance work?
Business as usual: You do what you do best and sell your services or products to your customers and issue the invoice for payment.
‘Sell’ your invoices: You decide how much of your sales ledger you want to release cash against. Your invoice finance provider will then buy the outstanding debt on those invoices.
Get your cash: Within 24-48 hrs you will receive up to 100% of the value of your sold invoices directly into your bank.
Customer pays their invoice: Whether you choose to stay in control of your sales ledger through invoice discounting or decide to let the provider take care of chasing payments with invoice factoring, once the customer pays their invoice the funds will go directly into the invoice finance provider’s trust account.
Receive the balance: Once the funds have been cleared and any pre-agreed fees and charges have been taken by the provider, you will receive the remaining invoice balance.
Is invoice finance a good idea?
If your business is in need of a cash flow boost and you are looking for a flexible solution, then invoice finance can be an ideal funding option. Releasing up to 100% of your outstanding invoice value within 24hrs can eliminate months of waiting for customers to pay and allow you to keep on top of your business costs and invest in further growth.
However, keep in mind that invoice finance is not designed to be a replacement for revenue. If you are currently suffering from low revenue, then you should consider other business finance options to help you through this period. Our team of expert advisors can help you decide whether invoice finance is the best option for your circumstances. Contact us now to find out if invoice finance is right for you and receive a free no obligation quote.