Invoice Finance comprises of Invoice Discounting and Invoice Factoring and is one of the most effective ways to improve cash flow in a business.
If cash is tied up in unpaid invoices due to long credit terms or late payment by customers, a business can experience operational problems.
Invoice finance allows a business to maintain a healthy cashflow even if customers pay late.
A healthy cashflow also allows the business to create positive relationships with staff and suppliers by paying them on time.
Invoices are one of the most flexible and valuable assets a business has. An Invoice Finance provider pays an upfront payment (up to 90% of the invoice value) to the business with the remaining balance paid when the customer settles their invoice.
Factoring is usually a disclosed service offered by the provider. You receive up to 90% of the value of the invoice within 24 hours. The Factoring provider manages your credit control and professionally chases your customers for payment. The provider will take control of your entire ledger.
Selective Invoice Finance offers an alternative to Factoring allowing businesses to fund individual invoices without being committed into a contract. Confidential Invoice Discounting is an alternative to factoring where you still manage your own credit control and like factoring, the invoice finance company pays up to 90% of the value of each invoice with the balance paid once your customer pays the invoice in full.
The service is also undisclosed so your customer is not aware you are using this facility. Some providers even offer a single invoice service and funding can often be drawn the same day.
These methods of improving cash flow are beneficial for businesses in all sectors and particularly for new companies, growing businesses or those with long credit terms or late payment problems.
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