How Does It Work?

You raise your invoice for goods or services as usual.

You raise the invoice, send it to the customer with a copy sent to the finance company.

The finance company will give you up to 85% of the invoice amount, usually within 24 hours

The remaining 15% is released as soon as the finance company is paid in full by your customer

What Does It Cost?

An Invoice finance company will provide finance in a similar manner to a bank – but, rather than have a fixed limit, your availability will be driven by the amount of security you have given to the “factor” by selling, or pledging you invoices.

They will charge interest in a similar way to a bank – say 4% over base.

However, in addition, as the invoice finance company will be collecting the proceeds of your invoices directly (there are various options), they will also charge a service charge being a small percentage of your invoice value.

The charge ranges and can be as low as 0.25% or as high as 3%. This depends on;

1. The nature of the debt security;
2. The level of advance made against the debt (typically 50% – 90%)
3. The days the invoice is outstanding.

Is It Confidential?

Yes, the process can be confidential, which, means that your customers will be unaware of the financing arrangements.  You usually continue to collect payments from your customer, but the money received goes into a bank account held by the finance company.  Some finance companies also offer an optional credit control and debt collection service.

How Do I Find The Right Finance Company?

All finance companies are different. Cashflow Restructuring specialises in finding a funder that best suits your business. Why waste time trawling the internet in the hope of finding the right partner when Cashflow Restructuring, as independent brokers, have access to a whole market of finance companies which we can compare to ensure that you find the best for you.