Invoice Finance

The term invoice finance generally covers the following products:

  1. Full Factoring
  2. Confidential Factoring
  3. Single Debtor Factoring
  4. Disclosed Invoice Discounting / Agency Factoring
  5. Confidential Invoice Discounting
  6. Export Factoring

All of the above products can be made available on a Recourse or Non-Recourse basis.
Invoice finance releases up to 95% of the value of a trade credit invoice, normally within 24 hours of receipt by the funder. This releases working capital tied up in the credit or extended credit often taken by customers – how often does an invoice issued to standard terms (say 30days or net monthly) actually get paid to terms? Invoice finance allows the cash flow of a business (its life blood) to be maintained.

Key Benefits

A flexible service geared to the business needs, with a choice of facilities that provide cash to match the growth in your sales ledger or simply accelerate the receipt of cash to support ongoing cash flow requirements and payments to suppliers.

Improved cash flow allows you to negotiate supplier discounts. The provision of an outsourced credit checking and control function can reduce overheads and improve collection of debt.

Full Factoring
All the benefit of the above. The factoring company will provide a dedicated sales ledger management team that credit checks customers, follows a structured Dunning Service (debt collection) including allocation of cash receipts. It will then provide you with detailed management information (aged debtor analyses, cash reports, customer information and performance statistics). Your customers are aware of the third party involvement as your invoice includes a Notice of Assignment and month end statements are issued by the factor

Confidential Factoring
All of the advantages of full factoring, however the collection service is managed using a separately controlled, non disclosed system. There is no Notice of Assignment and statements are issued in your name. Cash is however sent to a nominated bank account controlled by the factor

Single Debtor Finance
The assignment of a single invoice or single debtor to provide a quick short term boost to cash flow – usually on a disclosed basis.

Disclosed Invoice Discounting (Agency Factoring/Bulk Factoring)
Availability of cash is as with other facilities, the control of the sales ledger and collection process is retained by you. Payments however are routed to the funder under the Notice of Assignment that still is contained within the invoice. Statements are generated by you again with a Notice of assignment included. Often used as a stepping stone to Confidential Invoice Discounting

Confidential Invoice Discounting
The benefit of cash generated against invoices. The full control of the sales ledger and collection of cash is retained by you, Payments are sent to you for allocation, however payments are made into a trust account controlled by the funder but established in the company name. You provide the funder with a detailed reconciliation of the sales ledger movements and generally monthly management information. Whilst this service was originally designed for well established and profitable businesses, the service has now progressed to suit most of the SME market. The service can now be provided and managed completely online if required.

Export Finance
Dependant upon volume of export sales, any of the above services can be structured to incorporate export sales into the domestic facility. The provision of currency accounts in most major currencies is now common place. Specific export factoring incorporates specialist overseas sales ledger management with the benefit of multi-lingual collection teams. Some providers link to worldwide networks such as Factors Chain International or International Factors Group, allowing access to specialist internal market knowledge and collection.

Non Recourse

All services can be offered on a non-recourse basis. This provides bad debt protection, mitigating 85-100% of the trade risk. Cash flow is secured against late payment, protracted default and non-payment. Dependant upon the funder, this facility will either be provided in-house or the funder will work with one of the specialist credit insurance providers.

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Invoice Finance
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