What is Invoice Finance?
Invoice Finance is the generic term for Factoring, Invoice Discounting and Asset Based Lending products that are offered by many High St Banks and Independent Finance Companies and utilised by over 50,000 UK businesses, to finance their working capital requirements.
Invoice Finance works by bridging the working capital gap created by offering trade credit to your customers, with the financier releasing up to 90% of the value of sales invoices (inc VAT where appropriate) to your business, generally within 24 hours of its creation. This cash can then be utilised in your business to meet your day to day needs e.g. creditor payments, stock purchases etc.
Why should my business use Invoice Finance?
- Invoice Finance is far more dynamic than traditional forms of financing, such as overdrafts and loans, as it will grow in line with your sales ledger.
- Invoice Finance will bridge the working capital gap between payment of invoices from your customers and the need to make payments to your suppliers.
- Credit control can be built into a facility (Factoring) which can lead to a reduction in the time sales invoices remain outstanding and will be a cash benefit to your business. You may also gain an overhead reduction as there is unlikely to be a need for an in house credit control function.
- Facilities are generally committed meaning that they cannot be removed “on demand” in the way that overdrafts can be.
- Funds generated can be utilised for many purposes which may include the purchase of new stock at an advantageous price, the ability to fund an acquisition or undertake a Management Buy-Out or simply to remove the day to day cashflow pressures that you may experience.
- Many financiers will offer optional bad debt protection or will be able to arrange stand alone Credit Insurance policies that will give you additional piece of mind against debtor insolvency or protracted default.
Why should my business use Invoice Finance?
With the significant number of Banks and Invoice Finance providers within the UK offering cash-flow solutions, it is sometimes difficult to know which one will be the best one for my business?
Harrisons has built strong links with the vast majority of these funders and are therefore able to match your business requirements (large debtor concentration, export business etc) with the credit appetite of the lenders, in turn, significantly reducing the time you are required to give up explaining your business and also making sure your business is obtaining a commercial rate for the facility.
For more information on the individual Invoice Finance products, please click on the links below or if you prefer, complete the Get A Quote, Contact Form or email info@harrisonsfinance.uk.com. Alternatively simply telephone our national rate number 0845 601 5343 or contact your local Harrisons office, details of which can be found within the Contact Us section.
The following pages contain further information on invoice finance products.
| Factoring | Invoice Discounting | Asset Based Lending |
