They’ll take full control in managing your debtors (including chasing late payments), and can even credit check potential customers. With invoice factoring, a lender offers you finance based on a percentage of your entire sales ledger, which they then legally own. These are mainly in terms of how much control you have over your customer relationships and ledger. They’re not exactly worlds apart but there are a few crucial differences.
It can be easy to confuse invoice finance with invoice factoring. HOW IS INVOICE FINANCE DIFFERENT TO FACTORING? That way you’ll always have quick and easy access to a certain amount of cash. Likewise, if you have one main customer who generates a lot of revenue for you then you could only use it only for theirs. Ultimately, having full choice over how many invoices you finance means that if you only have one or two slow-paying customers then you can use your facility to take care of their invoices exclusively. It’s a cost-effective option that’s great for businesses that need ongoing or regular funding Some providers also offer whole-ledger facilities where you can get funding against all of your outstanding invoices. Subscription – you pay a fixed monthly fee to fund as many invoices as you like.It’s a super flexible option that’s great for one-off or seasonal needs Pay-as-you-go – pick and choose which invoices to finance as and when you need to access the cash.You get up to 90% of the cash you’re owed upfront, and pay a fee to the finance provider.Īt MarketFinance we have two invoice finance solutions. It offers you an advance against your outstanding invoices that you’ve issued for completed work. Invoice finance allows you to do just that. They represent money coming into your business and could hold the key to unlocking your cash flow – especially when you can tap into them on your own terms. Sometimes it can take 30, 60 or even 90 days for clients to pay up.īut your invoices are an asset. WHAT IS INVOICE FINANCE?Ī huge frustration for many businesses is knowing that they’re owed money for completed work, but having to wait to actually get their hands on it. To give you a better picture of how this handy financial tool could help your business, read on. But what is it? Here we’ll be focusing on invoice discounting specifically, which is the type of invoice finance we specialise in at MarketFinance. Invoice finance is used by lots of businesses to fast track the money they’re owed when they need it.
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