What is invoice finance?
Invoice finance releases up to 85% (sometimes 90%) of an invoice's value within 24 hours to avoid the delays experienced with trading on credit, thus releasing the cash to remove your day-to-day working capital pressures.
Also known as accounts receivable finance, sales finance, cash flow finance or debtor finance, invoice finance covers three main funding solutions – factoring, invoice discounting and asset based lending (ABL). Each solution can be tailored to suit a company’s individual cash and service requirements.
What are the benefits of invoice finance?
- Invoice finance is more flexible than traditional funding as it grows in line with your sales ledger.
- It allows you to bridge the gap between paying suppliers and receiving payment from your customers.
- Invoice finance enables your business to take advantage of supplier discounts.
- Credit control can be built into the invoice finance solution to reduce in-house overheads and improve sales ledger management.
- Credit protection can be added to protect against debtor insolvency or protracted default.
- Invoice finance can fund acquisitions or mergers.
- Unlike a bank overdraft, invoice finance facilities cannot be recalled on demand.
Which invoice finance solution is right for my business?
Invoice finance solutions can be tailored to suit the individual needs of any business. With over 70 providers across the UK and Europe from high street lenders to independent finance houses, speaking to an expert will save time and money.
- Factoring
Factoring allows you to focus on your core business by improving your cash flow while the factor provides a dedicated sales ledger management service and an outsourced credit control function. Debtor protection can be incorporated if required.
- Invoice Discounting
Invoice discounting solutions enable you to access cash against your invoices whilst retaining control of your sales ledger and credit management. It can be provided on a confidential basis, depending upon the needs of your business.
- Asset Based Lending
Asset based lending provides a means of accessing a greater level of funding against other assets on your balance sheet as well as debtors, including stock (raw materials, work in progress and finished goods), property, plant and machinery. In addition to generating working capital, the released cash can be used for funding mergers and acquisitions.
As the UK’s leading independent financial brokerage, Hilton-Baird will be able to identify the most appropriate and cost-effective invoice finance solution and provider to meet your business’ requirements.
To understand more about which invoice finance solution meets your business’ funding requirements, call us on 0800 9774833 or email info@hiltonbaird.co.uk.