Factoring and Invoice Discounting - Frequently Asked Questions

 

What is invoice finance?

Invoice finance helps you improve your cash flow by providing an immediate injection of cash against the value of your outstanding invoices. Then as you raise an invoice, up to 90% of the value of that invoice can be released. The remaining balance is paid to you, less charges, once payment is received from your customer.

This means your business has access to an ongoing supply of cash linked to your sales. So as your business grows so does the amount of funding available to you.


What is the difference between Factoring and Invoice Discounting?

Both factoring and invoice discounting are forms of invoice finance however with factoring, in addition to the cash that is provided, you can also save valuable management time. Your sales ledger is managed by the lender chasing and collecting outstanding invoice payments from your customers on your behalf, so that you have more time to concentrate on generating new business. The lender will prepare and send out statements, telephone all your customers, collect payments for you and maintain professional and detailed accounts of your transactions.

You remain in control by working with an experienced and dedicated team of people who ensure your customers are as happy to deal with us as they are with you.

With Invoice Discounting the credit control is managed by you which typically is provided for those established businesses who have their own credit control functions in-house.


How will my customers react to someone else chasing for payment?

At all times during the collection process an experienced team will endeavour to maintain good customer relationships in their efforts to keep overdue invoices to a minimum.


Can you provide bad debt protection?

Yes, bad debt protection can be provided as part of the product offering. The level of cover and cost varies according to business activity, customer risk and so on.


What does it cost?

Each service is tailored to your business so the fees will depend upon your specific needs.


What are the benefits of using invoice finance?

  • An immediate injection of funds
  • A flexible ongoing supply of working capital
  • Ability to negotiate early payment discounts with your suppliers
  • Reduction in bank charges as the initial payment can be offset against your overdraft should you have one

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