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Capital Equipment Finance > Asset Finance > Invoice Financing
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What is invoice financing?

The concept for invoice finance is simple; rather than waiting days or weeks for your invoices to be paid by customers, lenders advance you most of the value immediately. That means you get paid faster for completed work, so you can focus on running your business.

If your business regularly invoices for work, you could be eligible for invoice finance. As one of the best ways to ease cash flow problems and get paid faster for completed work, invoice financing is a great way to ensure your business continues to have cash flow and can carry on growing without being held back by your finances.

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Advantages of invoice finance

  • Gives your business quick cash – The clear advantage of invoice discounting is that you’re in control of raising cash quickly for your business. It can be made available as soon as an invoice is issued and can be used to help grow your business, buy more stock or pay wages.
  • Quicker turnaround – Compared to other types of business loans, invoice financing has a very quick turnaround. You could avoid having to ever wait again for the payment period by submitting your business invoices for invoice financing.
  • No risk to assets – As invoice financing is an unsecured business loan in place of your invoices, you won’t have to offer up physical assets from your company
  • Boosts credit sales – Invoice discounting can help convert credit sales into cash, which means SMEs enjoy quicker growth and development in a shorter amount of time.
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Restrictions of invoice finance

  • As with any type of finance product, there are some things to consider as a business when you explore invoice financing as a loan option. Some of the main restrictions to consider as a business owner is:
    • Your customers will need to be other businesses– Invoice financing is only available on commercial invoices meaning your customers have to be other businesses, not the general public.
    • Invoice factoring and client relationships– If you choose to apply for invoice factoring, then chasing payments will be out of your hands. This means your client relationships could potentially be impacted by this and there’s a risk of damaging these relationships.
    • Longer-term costs-Whilst invoice financing is a great short term solution for cash flow in businesses, it can have longer-term costs added on. Things to consider are interest rates and the processing costs associated with lenders if you choose invoice factoring.

    As with any loan, invoice financing comes with some great advantages and some things to consider. If you’re not sure which option would suit your business or need a more flexible approach, there’s a further option that could be just what your business needs.

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