What is invoice finance

Invoice finance is a generic term that covers factoring, invoice discounting and any other method of raising working capital via the sale of invoices or the debtor book.

Invoice finance has seen huge growth in recent years partly due to the banks’ reluctance to lend money to the SME sector on overdraft or term loan and partly due to the increasing knowledge that this method of finance is more suited to certain types of growing company than any other.

One of the major advantages of invoice finance is that the availability of funding isn’t fixed but should rise in line with increased sales unlike overdrafts which tend to have fixed limits in line with available security, thus making it far more suitable for fast growing companies than other methods of finance especially if the major asset within the company is it’s outstanding trade debts.

Factoring is the best known form of invoice finance and this facility normally includes full sales ledger management including credit control and is suitable for companies that spend too much unproductive time chasing up outstanding debts where their time would be better served in selling product and other more income generating pursuits.

Invoice discounting is usually undisclosed and doesn’t come with any sales ledger management so tends to be more suitable for companies that have established and robust accounting systems.

We have offered some guidance about the potential pitfalls of the various forms of invoice finance  including chapters on the poor service offered by some finance companies, how and why they keep the funding levels as low as possible and why the quoted rates may not be as straight forward it it may appear.

Factoring Solutions is one of the oldest established specialist invoice finance brokers in the UK and unlike many of our competitors we are completely independent with no ties to any factoring company for any reason at all.

There are no charges for our services and you therefore have nothing to lose but much to gain by talking to us as we only introduce people to one of the few invoice finance companies that actually perform so please call us now to discuss your individual requirements with no obligation and completely free of charge

 

Factoring Solutions

5 Torridge, Hockley, Tamworth, Staffordshire B77 5QL

Tel: 01827 707680