How to get the most out of your invoice finance facility


Shaking hands

The benefits of invoice finance include:


  • Get an immediate cash injection
  • It’s finance that grows with you
  • A secure form of finance
  • Buy efficiently
  • Extensive credit history is not required
  • Improve your profitability
  • Protect your business for the unforeseen
  • Cost effective
  • Quick decision within 7-10 days

Consider invoice discounting a safety cover for your company’s protection.

You don’t have to draw down the total amount, you don’t have to draw down anything – but if you need to or you suddenly lose that big customer – the cash is there.

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To keep the cash flowing is the most important part of any business, even more so in a recovering economy.

There are a number of advantages that invoice finance offers over other funding options.

Get an immediate cash injection

Accessing the money you’re owed allows you to grab new opportunities, bring plans to life, buy new equipment, be more efficient and negotiate the best terms with your suppliers.

A secure form of finance that grows with you

The sales ledger is used to secure access to funds, so as your business grows so does the amount of funds that can be made available to you. It is an ongoing source of funding sales, as your business grows and sales increase, so does the amount of working capital.

Buy efficiently to improve your profitability

The line of credit enables you to take advantage of special or end of line deals, buy the equipment that will help increase work-flow and take on extra business that may have previously stretched cash-flow.

Paying suppliers early lets you buy in larger quantities and take advantage of any volume discounts available.

Extensive credit history is not required

An extensive credit history is not required in the UK – the sales ledger of the business is used to secure access to funds. This means those businesses which may have been turned down for bank funding have a viable and trusted funding option.

Protect your business for the unforeseen

None of us know ‘what is round the corner’, much as we plan, forecast and focus on our businesses, we cannot cover for the unexpected. Consider invoice discounting a safety cover for your company’s protection and a sudden unforeseen change in circumstances can be instantly addressed.

Cost effective

Compared with other types of business finance, invoice finance is a cost effective solution, and when compared with bank funding, the cost of money advanced is competitive.

Quick decisions within 7-10 days

Typically a facility can be set up in seven to ten days, but it can be quicker, it’s really down to how quickly you can provide information.

A few tips on the best approach to lenders:

A targeted business plan is a pre-requisite when we apply for finance on behalf of clients. This gives lenders more confidence and often leads to getting the most competitive rates available, it does take a little more work but is often rewarded in the rates obtained.

When presenting a request we like to calculate the benefit of what the finance is being used for to enhance the case with lender. This is best demonstrated in clear numbers, this is the language all lenders understand. In cases of growth finance eg acquisition finance or asset purchases it is to demonstrate the exponential growth and benefit to the company or group as a whole. Whilst business growth and expansion seems the best course of action it comes with increased holding costs so it is always advisable to outline the rational and the tangible benefit of the purchase.

Lenders may need to do regular audits, this can be enhanced by your accountant fulfilling the role. It would again lead to obtaining better rates as the finance house don’t have to do as much work. Equally, your accountant is keeping in tune with your business progress and is closer to the “coal-face”, be aware and help with the running of the business as a whole.

Regular reviews are essential, especially as your business changes; a review recently conducted uncovered a £48,000 annual saving for the client.

Admittedly the client had grown significantly, but it is always worthwhile conducting a review to ensure you are getting the best deal.