Help Cashflow with Invoice Finance and Factoring

Invoice finance is ideal for those business houses that trade in goods on credit basis wherein he doesn’t have to wait two to three months for his invoices to be paid. In fact through invoice finance he gets the money due within 24 hours. In short, invoice finance turns your unpaid invoices into hard cash, thereby helps bridge the time and cash flow gap until your customer decides to pay. It can also be said that invoice finance gives companies the opportunity to transform unpaid invoices into working capital.

So how does it work? Here the invoice financier purchases your outstanding credit sales invoices and you get around 80 per cent of the value of these invoices within 24 hours. The providers then collect the monies owed from your debtors leaving you free to concentrate on your business. The remaining 20 per cent, less fee, is paid to you when invoices are settled.

The advantage of invoice financing is that it is extremely flexible with no concentration limits or maximum advance rates and it can provide as much as 90 per cent of gross invoice values. Invoice finance also fits in with your cash flow requirements, and with no set minimum period stipulated it leaves you to run your business properly. Invoice finance involves financing of a single debtor, a group of debtors or even the whole sales ledger.

The benefits of invoice finance is that you have access to the money owed to you within 24 hours instead of having to wait two or three months for your invoices to be paid; peace of mind from knowing that your invoices will be paid immediately; no chasing slow paying debtors, thereby leaving you free to concentrate on your business; improved cash flow can help you to obtain early payment discounts from your suppliers; flexible source of working capital you’ll be able to respond more quickly to market opportunities; flexible cost-effective alternative to an overdraft; and protects the goodwill of your business.