Invoice finance

Invoice finance
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What's the approximate total value of outstanding invoices?

£
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Release up to 100% of invoice value
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Completely free & no obligation service
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Low rates from as little a 0.1%

We compare a range of invoice finance providers

Barclays
Aldermore
LLoyds Bank
HSBC
Metro Bank

Benefits of our invoice finance comparison

Up to 100% advance rate for you

Up to 100% advance rate for you

Our advance rate offers can go up to 100% - this means that you could get up to 100% of the value of your unpaid invoices upfront
Finance from £5,000 to £1,000,000

Finance from £5,000 to £1,000,000

Invoice finance is a very flexible finance option which enables you to borrow anything from as little as £5,000 up to £1 million
Quick access to funds

Quick access to funds

With invoice finance, there is a quick turnaround of cash – you could have your finance in your account in just days!
28 day rolling contracts

28 day rolling contracts

For peace of mind
Trial periods available

Trial periods available

Experience whether invoice finance is the best option for your business before you fully commit
Transparent fees

Transparent fees

We won't add in hidden costs so you can budget to use the service without worrying about the cost
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What does invoice finance mean?

Invoice financing is a term which is used to describe a variety of asset-based lending options. A business can sell their invoices to a third party finance company, as a way to improve cash flow. The invoice finance company will charge a fee for their service, however the borrower is able to unlock the cash tied up in overdue invoices.

The business can then use this cash to pay employees, suppliers or even invest in one or more ideas to increase growth. Instead of waiting for an invoice to get paid, invoice finance can be used to instantly improve cash flow.

There are several types of invoice finance available, including factoring and invoice discounting. Each one is designed to provide asset-based finance, so you get instant access to cash without waiting for your customers to pay.

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How we've helped others find the right invoice finance deal

We can help you get an advance of up to 100% of your unpaid invoices.
Whether it's for £5,000 or £1 million - we can help you find the right invoice finance option at the lowest rate.

We're here to support you and your cash flow
We're here to support you and your cash flow
Our invoice finance helps businesses grow through invoice finance
Our invoice finance helps businesses grow through invoice finance
We're passionate about helping businesses get access to exclusive offers
We're passionate about helping businesses get access to exclusive offers
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Benefits of comparing invoice financing with us

UK
customer support
Exclusive
deals
Low rates
from 0.1%
Helping businesses
grow
through invoice
finance
Release up to 100%
of invoice value
Supporting
you and
your cash flow

Is invoice financing a good idea?

For many years invoice financing has provided businesses with an alternative form of borrowing. However, it is only in the last few years that businesses have really started to use this form of business finance to improve cash flow.

If your business struggles with late paying customers, it is likely your cash flow also struggles. Although some businesses have an effective credit control department, it may not be possible to wait lengthy periods for customers to pay. Every business relies on a healthy cash flow, although it is often small businesses and startups which feel the financial pressure from unpaid invoices quickly.

Another great benefit of invoicing finance is the amount your business can borrow , which increases in line with your turnover.

This often leads to a more flexible form of funding for businesses, in comparison to loans or overdrafts. If your sales are growing it is important that your cash flow maintains pace, which can be difficult if your invoices do not get paid on time. Invoice financing will untie funds within your sales ledger, so that your money works harder for your business.

Depending on the type of financing you opt for, your business could free up time spent chasing late payments. As experienced collectors of debts, they will be able to liaise with your customers to ensure quick and smooth payments, while you concentrate on your business. However, if you prefer to retain control of your accounts receivable, there are options available where you still retain responsibility.

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Is it possible to use invoice finance
with poor credit?

There are many invoice financing companies in operation, from small independent lenders to large high-street banks. For many businesses it can be difficult to borrow traditional business loans, however access to funding could be available through alternative forms of finance. The invoices listed in your sales ledger are considered an asset of your business, so many lenders will provide you with access to larger loan amounts in a faster amount of time.

The invoice finance provider will need to see a copy of your sales ledger, however their decision will also be based on the payment history of your customers. This means that if your business struggles with its own financial history, but has a solid turnover, you could still get approved for invoice financing. Although the lowest interest rates will be offered to those with a solid credit rating.

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What is invoice finance UK?

In 2017 a new trade association was formed, known as UK finance. Their role is to regulate the asset based lending industry, to ensure here in the UK we continue to operate as a global leader in the financial services industry. In the past, invoice finance was regulated by the Asset Based Finance Association and the new association continues to use the existing Standards Framework and independent Complaints Process.

However, it is not a legal requirement for invoice finance providers to be members of this trade association. By obtaining funding from a service which is a member of this trade association, you will benefit from transparent fees and charges.

Here at BusinessComparison we provide you with access to invoice financing companies you can trust. As a broker we have partnered with a range of finance providers which are based in the UK, so you have access to the funding you require. When you arrange invoice finance through our website, all fees will be clearly stated and you will receive transparent terms and conditions. Financiers can be specialist asset based independent lenders, part of a traditional financial institution or a group of individuals.

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What is the difference between invoice factoring and discounting?

More than 40,000 UK businesses have borrowed using their invoices at one time or another. There's no doubt that invoice financing can provide a valuable short term funding opportunity for businesses looking to improve their cash flow and, in many cases, expand their client base. However, despite many similarities, this type of lending is not a case of one size fits all! There are two main routes to this sort of lending and understanding the differences between them is crucial when it comes to getting the right short term borrowing solution for your business.

understanding the differences between them is crucial when it comes to getting the right short term borrowing solution for your business.

The main difference between invoice factoring and discounting is with who takes responsibility for the sales ledger and collecting payment from customers.

Conveyor belt

Invoice factoring means the factor company pursues the payment on behalf of your business:

  • They buy your raised and unpaid invoices for a percentage and at a discount
  • They collect payment from your debtors
  • They provide you with the remainder of the balance once it has been paid
  • They take a fee for the service out of the final payment
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Benefits of using invoice factoring include:

  • It saves time and stress when it comes to chasing customers for payment
  • It allows business leaders to focus on future service delivery, building their business and generating more income
  • It increases your businesses chances of dealing with clients who pay on time because factor finance companies will run credit checks on future customers
  • It offers the potential for you to gain help negotiating better terms with your suppliers
Barista

Invoice discounting enables businesses to retain their sales ledger and payment collection from their customers:

  • You send an invoice to the customer as usual and a copy to the invoice finance lender
  • The lender purchases your invoice at an agreed percentage of the value minus their fee and usually within 24 hours
  • You keep responsibility over the administration of your invoice
  • You receive the remaining balance of the invoice value less any charges
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Benefits of using invoice discounting are:

  • Control over the collection of funds, sales ledger and credit control remains within the business
  • You can continue to nurture contacts with customers by collecting directly from them
  • It is discreet form of lending and customers need never know that you are using invoice financing
  • It is very fast - in some cases you can have the funds in your account within 24 hours

It's worth noting that there are similar guidelines for
both types of lending:

  • You must be trading business to business
     
  • You must have a minimum turnover of £50k per annum net of VAT
  • So which type of invoice finance is right for your business? Factor or discount?
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What are the eligibility requirements for invoice finance?

There are some basic requirements which your business must meet, to be eligible for invoice financing:

  • Your customers must be other businesses.
  • In most cases your business must be a registered limited company or LLP, although some lenders are willing to accept other company types.
  • The credit terms you offer must be standard to your industry
  • Your minimum turnover should be at least £50,000
  • You may need to issue a minimum number of invoices each month, although the amount varies between lenders

When you apply to the factoring or discounting provider, they will determine the level of risk associated with your business. The risk level will be influenced by your customers history of payments, your relationship with your customers and the industry you operate in.

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Invoice finance - Frequently Asked Questions

When businesses sell services of physical goods to customers, often these are sold on credit. This allows customers to get the items or service they need, as long as they pay within an agreed credit term. However, this can mean your business needs to wait a long time for payment, if the customer does not pay within the agreed time frame. Although you may get paid on time, your business will still need to pay for the cost of providing the goods or services before receiving payment, which can leave a temporary shortfall in cash flow.

If you decide to use a form of invoice finance to obtain credit, you will continue to trade and issue invoices to your customers in the usual way. You will then need to provide the invoice financing company with a copy of the invoice. The lender will issue your business with an agreed percentage of the invoice, so your cash flow instantly improves, without waiting for your customers to pay.

Depending on whether you choose invoice discounting or invoice factoring, you may need to continue to chase the unpaid invoice in the usual way. Once your customers pay the invoice, your business will receive any remaining amount minus the agreed fee and borrowed amount.

Invoice purchasing is a form of invoice finance, where the company essentially buys the invoice. The invoicing company takes over the risks and responsibility of chasing the invoice payment. Please click here to see BusinessComparison's invoice purchasing options.

Invoice discounting is another form of invoice finance, which allows businesses to release cash tied up in the sales ledger. Your business remains in control of its credit control procedures, so you will continue to collect payments from late paying customers. Please click here to see BusinessComparison's invoice purchasing options.

A factory company offers a form of invoice finance, where they take responsibility for your credit control processes. They provide you with an agreed percentage of unpaid invoices, then collect payments in full from your customers. Your business will then receive any remaining balance, minus any charges when your customers pay their invoice.

Invoice factoring is not confidential, so your customers will be aware that you are working with an invoice factors company. As a business if you would prefer to maintain confidentially and keep your debtor collection within the business, invoice discounting may be the one to consider.

In a similar way to invoice discounting, invoice factoring provides access to capital which is tied up within invoices. The main difference with factoring company's is that they take control of your credit control and accounts receivable processes.

Interested in invoice factoring or discounting for your business?

Let us help you get the best deal with a free, no obligation quote.

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Compare your invoice finance options today!

Here at BusinessComparison, our aim is to help businesses compare a variety of financial products, from invoice financing to bank accounts and utilities. Our panel of lenders includes a variety of leading invoice financing companies, so you get access to the best terms within our industry leading website. To find out more about invoice finance or any other form of business borrowing, please contact our experienced team today.

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