why invoice finance
A valuable source of funding to fuel your business
Whatever your business finance objectives, whether it be expansion plans, new acquisitions or improving cash flow, invoice finance could be a suitable option for your company.
- Invoice finance could release up to 95% of your business' invoice value
- Capitalise can match an appropriate invoice finance provider to your business, however you are under no obligation to proceed with the selected provider
- Invoice finance can be used on a short-term and long-term basis, depending on the needs of your business
- Eligibility is based on your dealings with creditworthy companies, not the credit rating of your business, so funding is easier to obtain than a bank loan
While invoice finance does require a fee, having an influx of cash on a regular basis can make it possible to avoid costly expenses such as late fees on past due bills, missed early payment discounts and high interest charges for credit card purchases.
how does invoice finance work
Send original invoices to your customer(s) and copies to the lender
Receive up to 95% of the invoice amount - usually within 24 hours
Once the lender is paid by your customer(s), receive balance minus agreed upon fees
Invoice factoring and invoice discounting compared
Factoring means your chosen lender will collect the payment from your customer.
This method is usually easier to secure for small to medium sized or less established businesses and your customers will know you are using this method of raising finance.
The invoice financier handles the credit control directly, and could also potentially help negotiate terms with your customers.
Read more about invoice factoring.
Invoice discounting is more straightforward and is usually only available to larger, more established businesses.
In contrast to factoring, you will have to do your own credit control but your customer will be unaware that you are borrowing against their invoices.
You can also avoid a third party (the invoice financier) dealing directly with your customers.
Read more about invoice discounting.
Frequently asked questions about Invoice Finance
If you sell goods or services on credit to other creditworthy businesses and your invoices are for fully-delivered goods and/or services, you meet the basic criteria. With invoice finance, your future growth is more important than an extensive credit history.
No, you can have cash advanced to you for all your invoices or only for ones from select customers. Invoice finance allows you to maintain control over your collections and relationships with your customers.
Some lenders finance one-off invoices on an as-needed basis. This is called spot factoring and we work with lenders who provide this type of finance. Since there is no minimum requirement, we encourage you to make ongoing, regular use of invoice finance to keep it active. You can terminate the agreement at any time and there are no penalities.
Yes. It is possible to get a new lender in place to lend as soon as the contract is open.
Invoice finance is viewed as a normal, progressive business practice for growth-oriented companies. In fact, it is one of the fastest growing types of funding, used by more than 40,000 companies in the UK in a given year, according to the British Insurance Brokers' Association.