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Your business needs easy access to cash to pay the bills before your customers pay you. Invoice finance provides this cash. It's flexible, cost-effective and suitable for both start-ups and established firms. Please note to be eligible you need to be turning over £50k or more and the majority of your business should be business to business.

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An invoice finance deal will be tailored to meet your specific needs. The length of contract (from as short as 30 days), funding levels and the range of services included will form a package that gives your business the cash flow it requires.

How invoice finance works

If your business sells on credit terms, invoice finance can be used to boost your cash flow. As soon as you raise an invoice to your customer, a lender gives you an advance of up to 95% of that invoice's value. It's as if the customer had paid you immediately, putting cash into your bank account.

The small amount of the invoice that remains unpaid will be settled when the customer settles their bill. The lender deducts their charges from this balance and passes the rest to you.

Improve cash flow without an overdraft

Invoice finance solves the problem of finding cash to fund your start-up. It avoids taking on the fixed payment terms of a big loan, if you're able to get one. Invoice finance also overcomes the problem of not qualifying for an overdraft facility.

The cost of invoice finance is often comparable to, or even less than, that of other forms of business finance. Because you're using money you've already earned, less personal security is usually required. There are two main forms of invoice finance - factoring and discounting.

The benefits of invoice finance:

  • It grows with your business – The more you sell, the more you can borrow, meeting your cash flow needs as you grow.
  • Extremely flexible finance – Borrow what you need, when you need it, so that you can bridge the gaps in your cash flow.
  • Less personal security required – The finance is secured against cash you've already earned, so you'll usually be asked for less personal security compared to other forms of finance.

Why you should speak to Touch

  • Benefit from our experience – We've helped thousands of firms get the finance they need and we work with the UK's leading lenders.
  • Get access to special deals – We can secure preferential rates and terms not available elsewhere.
  • Independent of the lenders – We're a broker and it's in our interest to get you the best possible deal from one of our panel of funders.

Invoice factoring explained

Invoice factoring gives you a double benefit. It boosts your cash flow and takes away the frustrating task of credit control.

In a factoring arrangement, your lender advances you up to 95% of the value of a sales invoice that you've just raised. The balance is paid later, less charges, when your customer pays up.

The lender also takes responsibility for managing some or all of your outstanding invoices. This gives you time to concentrate on running your business rather than chasing debtors.

What invoice factoring can do for you

Many firms, both start-ups and businesses which have been running for a while, find invoice factoring is the best way to bridge the cash flow gap. Those weeks between raising an invoice and getting paid can feel very long, especially when you have bills to pay.

Factoring also provides peace of mind. You're not taking on debt, because it's money that you've already earned through sales. At the same time, you're spared the stress of juggling cash and credit cards to make the payments which keep suppliers happy.

Invoice factoring is ideal for start-ups

  • Avoid cash flow headaches from the start – Don't let slow-paying customers hold you back, by getting the cash you need from the time you invoice.
  • Focus on expanding your business – By outsourcing credit control, you can put all your energy into winning new business.
  • Get the cash you need to invest in growth – Seize commercial opportunities by having the capital you need to fund the resources required.

Talk to us about invoice factoring:

  • Try before you commit – Through our lenders, we can arrange for you to use invoice factoring for 30 days to see if it's right for you
  • Flexible terms – We'll help you find a deal that doesn't lock you in for months.
  • Expert knowledge – Whatever business you're in or issues you're facing, we've helped other firms to solve similar problems.

Invoice discounting explained

If you're looking for the flexibility of invoice finance but want to maintain control of your own sales ledger, you're looking for invoice discounting.

The funding process is very similar to factoring. You invoice your customer and the lender pays you up to 95% of the invoice value; the balance, minus charges, is paid when the customer settles their bill.

Discounting is a great solution for firms with robust credit control and/or who want an invoice finance arrangement to be operated confidentially.

Gain commercial advantage through discounting

You could be paid within 24 hours of issuing an invoice, which could put you in a strong position compared to your competitors.

This injection of cash can make all the difference, allowing you to pay staff and purchase assets which otherwise would be much harder, if not impossible, to afford.

Securing market share and having the capacity to deliver on commitments are the foundations of success. Invoice discounting gives you the cash which will help achieve these aims.

The benefits of invoice discounting

  • Invest in growth – Having a secure cash flow allows you to bring in the resources you need, not just for today, but also for your future.
  • Flexible finance – The amount of finance available will grow in line with your turnover, i.e. the more invoices you raise, the more cash is available.
  • Negotiate discounts with your suppliers – You have the cash available to pay suppliers promptly, allowing you to ask for better terms.

Avoid the traps which claim start-ups:

  • Don't run out of cash – Profitable start-ups fail because, when the cash dries up, they can't operate. Invoice discounting helps you side-step this common problem.
  • Focus on tomorrow not today – Managing tight cash flow and scarce resources can take up too much time. The cash from discounting helps you to jump this hurdle.
  • Secure your brand in the market place – With the cash and resources in place, you can build a reputation for reliability and quality, tightening your grip on the ladder of success.

Factoring Infographic – A new take on understanding how factoring works

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How you benefit from using Touch Financial

  1. We search the market on your behalf – We're partnered with over 20 of the UK's leading lenders. We know the strengths of the different lenders and who offers the best rates.
  2. You are introduced to the most suitable lenders – Once we understand your business, we will shortlist and recommend two or three lenders best suited to meet your requirements.
  3. You receive ongoing support – Our team of experts will keep in regular contact to ensure everything is running smoothly.
  4. You won't be charged a penny by us – Our expert advice is completely free and there are no hidden fees. This is possible because we receive commission from successful introductions – much like a mortgage broker.

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