Invoice Finance – 04/01/22 – Daniel Swaisland

Firstly, I’d like to wish a Happy New Year to our readers, I hope everyone had a relaxing festive break. Sadly however, with the dreaded corporation tax deadline on 1st January and the seasonal slow down of business in the second half of December, this isn’t always the most relaxing time of year for a lot of people, which is why I thought it a prudent time to discuss one of our key offerings… As a business owner or company finance controller, have you ever found yourself wishing customers could/ would just pay a little bit sooner? Do you find that you need to offer customers lengthy credit terms to remain competitive but on occasion it’s to the detriment of your own cash flow and perhaps stops you from placing your next order, as your supplier demands upfront payment? You could do with better cashflow, but you don’t want to be tied into any business loans and would love something a bit more flexible? Invoice finance could be for you…

Invoice finance is short-term borrowing against cash that’s owed to you by your customers or ‘tied up in invoices’. It’s a means of unlocking this cash from day 1, rather than having to wait 30/60/90 days or longer to get paid, meaning you can get on with placing your next order; paying staff; paying your VAT bill or whatever demanding expense is round the corner. This obviously gives you the flexibility to grow your business quicker, which is why the outdated stigma around Invoice Finance only being a tool for struggling companies is these days unfounded, as it’s a facility used by many large companies with huge balance sheets as a means of fuelling more rapid exponential growth while not risking business opportunities by being able to provide their customers with sometimes months to pay.

Invoice finance facilities remove the fear some business owners might have when thinking about loans or finance of ‘biting off more than they can chew’ as it’s based solely on the value of your sales ledger and all transactions will be credit insured, to protect the user from bad debt.

Our facilities even free up time for our clients as all the settlement chasing is done for them, if they choose. It’s also completely confidential, so their customers are unaware they’re even using the facility and as far as the customer is concerned, they’re making payment back directly to our client. What really happens is once we* receive an invoice, we’ll lend up to 90% of the value of that invoice from day 1, you’ll then pay a small fee based on the length of time you’re borrowing for. We’ll chase the payment from your debtors and once received, we’ll send you the other 10% less our small fee. Historically, this fee has been as low as 0.0275% per day or 0.825% per month. To put this into perspective, borrowing £10,000 for a month could cost just £82.50 – in this example it’s a question for the individual business owner, accounts manager or financial controller of whether they would benefit more from having £10,000 immediately and ending up with £9,917.50 in 30 days or £10,000 in 30 days. If you could place an extra order in this 30 days and make more than £82.50 profit, then Invoice Finance might be for you!

*We work with a network of brokers and lenders to source our clients the best facilities to suit their needs. We can even provide PAYG Invoice Finance facilities, where unlike a conventional bank facility, you only pay when you borrow and not a minimum amount every month.

If you think Invoice Finance could help you grow your business or would just like further information, drop us an email on or just give us a call on 0207 183 2026.

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