Cashflow is often a problem for small businesses and Invoice Finance may represent a possible alternative and cheaper solution to the traditional bank overdraft.
For a fee, an Invoice Finance provider will make an initial payment to a small business based on a percentage of the value of an unpaid invoice. This may be as high as 90%. The outstanding amount of the invoice is paid to the small business when the customer settles the bill.
Businesses can choose one of two possible products. The first, ‘Factoring’, provides a credit control service as well as funding of the value of the invoice and is available for new aswell as established businesses. The second, ‘Discounting’, provides funding only.
Invoice Financing is a flexible borrowing solution for small and medium sized businesses, particularly those which suffer cashflow problems due to late or non payment of invoices.