Invoice Finance
What is Invoice Finance?
Put simply, Invoice Financing is a way for businesses to borrow money against amounts due from customers. Invoice financing can be structured in a number of ways, usually by factoring or discounting.
Factoring is the process of selling outstanding invoices to a lender who then pays a fee – normally a percentage of what the invoices are worth in total. Once the lender has received payment for invoices purchased, the full amount is returned to the business minus the small fee agreed at the sale of the invoices.
The other form of invoice financing is Invoice Discounting, in which case the lender pays the business the value of the invoices as normal but does not collect the outstanding amount themselves – this is done as normal by the business. The advantage of this is that the customer is never aware of the arrangement between the lender and the business.
The Problem
In an ideal world, every business would have all invoices paid as soon as they are issued. Unfortunately, this is not always the case and as such, businesses are left with outstanding invoices needing to be paid which can severely impact a steady cashflow. A steady stream of finance into a business is vital to the maintaining of businesses standards and to the ongoing growth of a venture, so minimising the amount of outstanding payments is paramount. This is where Invoice Finance can help.
How we can help
Invoice financing helps businesses improve cash flow, pay employees and suppliers, and reinvest in operations and growth earlier than they could if they had to wait until their customers paid their balances in full. Invoice financing is completely confidential, with only the business and lender involved. Furthermore, the process encourages prompt payments from business debtors, which in turn aids a consistent cash flow. By working with Simple Secure Finance to secure the payment of these invoices, you can gain a greater level of flexibility than loans or overdrafts and maintain a consistent cash flow for your business.
Would you like to know more?
Get in touch to see how we can help your business today.
Looking for Invoice Finance?
Find out how much cash you could access from your unpaid invoices using our Invoice Finance Calculator. Simply fill in your details below, and the calculator can show you the invoice factoring rates you could expect to receive from a lender.